4.12. - 4.14. SR 06-30-1997~ity of
River
Items # 4.12., 4.13., & 4.14.
MEMORANDUM
TO:
FROM:
Mayor & City Council
Lori Johnson, Asst. City Administrator/
Finance Director
DATE:
SUBJECT:
June 27, 1997
General Obligation Bonds
There are three bond resolutions on the agenda for Council action. These
resolutions were prepared by Jim O'Meara, bond counsel. Springsted has
also assisted in the preparation of documents for these bond issues. The
following is a brief outline of each of the bond issues. Details on the
improvement and water revenue bonds can be found in the Recommendations
prepared by Springsted.
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE
CITY'S $1,245,000 LIQUOR STORE REVENUE BONDS OF 1997
As the Council is aware, the Liquor Revenue Bond is a negotiated issue being
purchased by equally by First National Bank of Elk River and The Bank of
Elk River. The interest rate is £Lxed at 6.35 percent for the ten year term of
the bond. The resolution does allow the City to prepay the bond, but only for
the purpose of constructing a second store. Approval of this resolution
awards the sale with funds to be disbursed to the City on July 1.
RESOLUTION PROVIDING FOR THE SALE OF THE CITY'S $1,165,000
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1997A
This resolution simply provides for the sale of improvement bonds with bids
being received until Monday, July 28, after which the Council will consider
award of the bonds. These improvement bonds are to finance several projects
including Joplin Street, Orono Lake Third, Lowell Street, Riverview and
Macon, and Joplin and 185th Intersection and Frontage Road. Additional
information on the exact amount included for each project is attached. The
13065 Orono Parkway ° P.O. Box 490 ° Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
project listing also shows the assessment revenue levied or to be levied for
each of these projects.
RESOLUTION PROVIDING FOR THE SALE OF THE CITY'S $335,000
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 1997B
The water utility has approved watermain improvements to Highland Road
which will be paid through water revenues. Water Revenue bonds are being
issued by the City for the Municipal Utilities to fund the construction portion
of this project. Bryan Adams has reviewed and approved the information
included in the attached Recommendations as it relates to the Water
Revenue issue. Bids on this issue will also be opened on July 28 and
presented to the Council for approval at its meeting later that day.
ACTION REQUESTED
The Council is asked to approve the above stated resolutions: the resolution
providing for the issuance and sale of the Liquor Revenue bonds, the
resolution providing for the sale of the City's 1997 Improvement Bonds, and
the resolution providing for the sale of the City's 1997 Water Revenue bonds.
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly held in the Elk River City Hall on June 30,
1997, commencing at P.M., C.T., in part for the purpose of
consideration of awarding the sale of the City's Liquor Store
Revenue Bonds of 1997.
The following Councilmembers were present:
and the following were absent:
During said meeting,
introduced the following Resolution and
moved its adoption:
RESOLUTION NO.
RESOLUTION PROVIDING FOR THE ISSUANCE
AND SALE OF THE CITY'S $1,245,000
LIQUOR STORE REVENUE BONDS OF 1997
BE IT RESOLVED by the City Council (the "Council,,) of
the City of Elk River, Minnesota (the "City"), as follows:
1. Recital~s. It is hereby determined:
(a) The City has determined to acquire,
construct, equip, furnish, operate, and maintain a new
municipal liquor store (the "Liquor Store"), and the
costs of completing and financing the Liquor Store are
currently estimated to be $1,393,535. The City
currently owns and operates a municipal liquor store,
3554?0.1
which will be closed upon completion of the new Liquor
Store, estimated to occur in October 1997. Excess
funds currently on hand in the City's Liquor Store Fund
and estimated to be generated in the coming months from
operation of the existing liquor store will be used to
reduce the necessary bonding amount to $1,245,000 and
to help make initial debt service payments on the Bonds
hereinafter described.
(b) The City is authorized to acquire and
complete the Liquor Store and to finance the same
through the issuance of the City's liquor store revenue
bonds pursuant to applicable law, including without
limitation Minnesota Statutes, Section 426.19, and the
Council hereby finds that it is necessary and expedient
to the sound financial management of the City that the
City do so.
(c) The City has retained Springsted Incorporated, in
Saint Paul, Minnesota, as its independent financial advisor
for the Bonds and is therefore authorized and hereby
determines to sell the Bonds by private negotiation, as
authorized by Minnesota Statutes, Section 475.60,
Subdivision 2(9).
2. Acceptance of Offer. First National Bank Elk
River and The Bank of Elk River (collectively, the "Purchaser")
have offered to purchase the City's $1,245,000 Liquor Store
Revenue Bonds of 1997 (the "Bonds',) at a price of $1,245,000 par,
the Bonds to be subject to the terms and conditions herein
provided. The Purchaser has in that connection submitted to the
Council for its consideration a certain Bond Purchase Agreement,
and the Council hereby approves and accepts said Agreement and
authorizes the Mayor and City Administrator to execute the same
at such time and with such amendments thereto as they may deem
desirable, as evidenced by their execution and delivery thereof.
3. Authorization for Issuance. The City shall
forthwith issue the Bonds. The Bonds shall provide funds to
finance the Liquor Store, the total cost of which is estimated to
be at least equal to the amount of the Bonds. Work on the Liquor
Store shall proceed with due diligence to completion. The Bonds
shall be dated as of the date of delivery thereof to the
Purchaser, which shall be July 1, 1997, or as soon thereafter as
settlement can be arranged with the Purchaser, shall be a fully
registered bond without interest coupons and shall mature and
bear interest and be payable as provided in the form of the Bonds
set out in paragraph 5 of this Resolution.
3554?0.1 2
4. ~ond Reqistrar. Both principal of and interest on
the Bonds shall be payable by the City Finance Director, who
shall also act as registrar and transfer agent (the "Bond
Registrar") for the Bonds.
5. ~orm of Bond. The Bonds shall be two in number
(numbered R-1 and R-2, respectively), each in the denomination of
$622,500, and shall be identical except for the name of the
registered owners thereof, bein~ the two purchasin~ banks,
respectively, mentioned in paragraph 2 hereof. Each of the Bonds
shall be substantially the followin~ form:
355470.1 3
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
$622,500
LIQUOR STORE REVENUE BOND OF 1997
KNOW ALL PERSONS BY THESE PRESENTS that the City of Elk
River, Sherburne County, Minnesota (the "City"), for value
received, hereby promises to pay, but only from the sources and
as hereinafter provided, to
or assigns duly registered on the Bond Register (the ,,Owner")
maintained by the City Finance Director, the principal sum of SIX
HUNDRED TWENTY-TWO THOUSAND FIVE HUNDRED ($622,500) on February
in the years and principal amounts, respectively, as follows:
Year
Principal Amount
1998 $ 45,000
1999 37,500
2000 40,000
2001 40,000
2002 70,000
2003 72,500
2004 77,500
2005 82,500
2006 87,500
2007 70,000
$622,500
or on any earlier date on which the principal amounts of this
Bond may be and shall have been duly called for prepayment, and
to pay interest to the Owner from the date hereof on the
principal amounts hereof until the same are paid at the rate of
six and thirty-five hundredths percent (6.35%) per annum,
interest to maturity payable on February 1, 1998, and on each
August 1 and February 1 thereafter. Interest shall be calculated
on the basis of a 360-day year consisting of 12 months of 30 days
each. Both principal of and interest on this Bond are payable in
any coin or currency of the United States of America which on the
date of payment is legal tender for public and private debts. At
the time of final payment of all~.principal of and interest on
this Bond, the Owner shall surrender this Bond to the City
Finance Director.
355470.1 4
Manner of Payment. The principal of and interest on
this Bond are payable when due by check or draft mailed,
transferred by wire or otherwise delivered by or on behalf of the
City Finance Director to the person that was the Owner hereof as
of the end of the day, whether or not a business day, immediately
preceding the applicable payment due date; provided that if the
City shall be in default in payment of interest due on said date,
whenever money becomes available for payment of such defaulted
interest, the City Finance Director shall establish a special
record date with respect to the payment thereof and shall mail
written notice of the special record date not less than fifteen
(15) days prior to such date to the Owner of the Bond as of the
close of business of the City on the fifth (5th) business day of
the City preceding such mailing, and the Owner as of the special
record date shall be entitled to receive the payment of such
defaulted interest.
Issuance; Purpose; Special Revenue ObliGation. This
Bond is one of an issue of two Bonds having an aggregate
principal amount of $1,245,000, both Bonds being of like date,
tenor, principal amount, interest rate, and principal payment
schedule. The Bonds are issued under and pursuant to and in full
conformity with the Constitution and laws of the State of
Minnesota and pursuant to a resolution adopted by the City
Council, the 9overning body of the City, on June 30, 1997 (the
"Resolution"), for the purpose of providing money to finance the
acquisition and completion of a municipal liquor store to be
owned and operated by the City (the "Project"). The principal of
and interest on the Bonds are payable solely and exclusively from
the Net Revenues of the Project (as said Net Revenues are defined
in the Resolution) and from such other funds, if any, as may
become available to pay debt service on the Bonds pursuant to the
Resolution. This Bond is not a 9eneral obligation of the City.
Reference is made to the Resolution for a fuller statement of the
sources of revenue which are or may become available to pay the
principal of and interest on the Bonds, of the additional
provisions respectin9 the security of the Bonds, and of the
conditions upon which the City may issue other bonds or
obligations on a parity with the Bonds.
Optional Redemption. The principal amounts of this
Bond are subject to prepayment, at par plus accrued interest,
without penalty at the option of the City, in whole but not in
part, on July 1, 2002, and on any date thereafter upon 15 days'
prior written notice to the Owner, but only in~.the event that the
City Council shall have reasonably determined Ghat such
redemption is necessary in order to allow the City to construct
or finance a second municipal liquor store.
355470.1 5
Transfer. This Bond is transferable, as provided in
the Resolution, upon the Bond Register kept by the City Finance
Director at City Hall upon surrender of this Bond, together with
a written instrument of transfer duly executed by the Owner or
the Owner's attorney duly authorized in writing, and thereupon a
new, fully registered Bond in the same aggregate principal amount
shall be issued to the transferee in exchange therefor (or the
transfer shall be duly recorded on the Bond Register and the
Certificate of Registration section hereof), upon the payment of
charges and satisfaction of applicable conditions, if any, as
therein prescribed; provided that such transfer may occur only
with respect to the entire Bond and all of the remaining
principal amount hereof. The City may treat and consider the
person in whose name this Bond is registered as the absolute
Owner hereof for the purpose of receiving payment of or on
account of the principal of and interest on this Bond (except for
the payment of interest to the Owner as of a special record date)
and for all other purposes whatsoever.
Qualified Tax-Exempt Obliqation. The Bonds have been
designated by the City as a ,'qualified tax-exempt obligations"
within the meaning of and pursuant to Section 265(b) (3) of the
Internal Revenue Code of 1986, as amended.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, to have happened and to
be performed precedent to and in the execution and delivery of
this Bond do exist, have happened and have been performed in due
form, time and manner, as required by law, and that the issuance
of the Bonds, together with all other indebtedness of the City,
does not exceed or violate any constitutional or statutory
limitation of indebtedness.
IN WITNESS WHEREOF, the City of Elk River, Sherburne County,
Minnesota, by the City Council, its governing body, has caused
this Bond to be executed in its name and on its behalf by the
manual signatures of its Mayor and its City Administrator and has
caused the official seal of the City to be impressed hereon, all
as of , 1997.
CITY OF ELK RIVER, MINNESOTA
B~
Mayor
By.
City Administrator
355470.1 6
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Bond was as of the
latest date specified below registered in the name of the last
registered Owner noted below and that, at the request of said
registered Owner of this Bond, the undersigned City Finance- ·
Director has as of said applicable date registered the Bond as to
principal and interest in the name of such registered Owner, as
indicated in the registration blank below, on the books kept by
the undersigned for such purposes.
NAME OF REGISTERED OWNER
DATE OF
REGISTRATION
SIGNATURE OF CITY
FINANCE DIRECTOR
, 1997
(End of Form of Bond)
355470.1 7
6. Legal Opinion. The City Finance Director shall
obtain a copy of the proposed approving legal opinion of bond
counsel for the Bonds, Briggs and Morgan, St. Paul, Minnesota,
and shall cause such opinion to be filed in the offices of the
City.
7. Execution. The Bonds shall be executed on behalf
of the City by the manual signatures of Mayor and City
Administrator and shall be duly registered by the manual
signature of the City Finance Director as Bond Registrar. The
official seal of the City shall be impressed on the Bonds. The
Bonds, when fully executed, shall be delivered by the City
Finance Director to the Purchaser, and the Purchaser shall not be
obligated to see to the proper application of the proceeds
thereof.
8. Fund and Accounts. In order to provide for the
proper administration of all funds which are derived from the
operation of the City's existing liquor store and the Liquor
Store, the City Finance Director has heretofore established and
shall continue to maintain a Liquor Store Fund (the "Fund") which
shall remain a separate fund of the City subject to the following
separate accounting:
(a) Project Account. To the Project Account within
the Liquor Store Fund there shall be deposited the proceeds
from the sale of the Bonds. From the Project Account shall
be paid all costs of the Project including legal,
engineering, financing and other such expenses incidental
thereto. The City hereby covenants to complete the Liquor
Store and hereby appropriates such other funds of the City
as may be necessary to do so, if the proceeds of the Bonds
should prove insufficient for that purpose. Any balance
remaining in the Project Account after the payment of such
costs shall be transferred to the Operation and Maintenance
Account described below.
(b) Operation and Maintenance Account. To the
Operation and Maintenance Account within the Liquor Store
Fund shall be paid all revenues and receipts from the
operation of the Liquor Store, including all revenues
derived from the interim operation and subsequent lease,
sale or other disposition of the existing liquor store
(collectively, the "Gross Revenues"). From this account
there shall be paid all, but only, current expenses of the
Liquo~ Store. Current expenses shall include the reasonable
and n~cessary costs of administering, operating, maintaining
and insuring the Liquor Store, the cost of salaries, wages,
merchandise sold and other similar items, costs of materials
and supplies, necessary legal, engineering and auditing
355470.1 8
services, and all other items which, by sound accounting
practices constitute normal, reasonable and current costs of
operation and maintenance, but excluding any allowance for
depreciation, extraordinary repairs and payments into the
Debt Service Account. All money remaining in the Operation
and Maintenance Account, after paying or providing for the
foregoing items, shall constitute and are referred to in
this resolution as "Net Revenues."
(c) Debt Service Account. To the Debt Service Account
within the Liquor Store Fund there shall be credited such
amounts of Net Revenues as shall be necessary from time to
time to make full and timely payment of the debt service on
the Bonds, and said funds, when deposited into the Debt
Service Account, are irrevocably pledged for such purposes.
(d) Excess Net Revenues. Net Revenues in excess of
those required for the foregoing purposes may be used for
any proper purpose of the City, including without limitation
capital and other costs of the City's liquor store
operations.
Any proceeds of the Bonds and any sums from time to time
held in the Debt Service Account in excess of amounts which under
then-applicable federal arbitrage regulations may be invested
without regard to yield shall not be invested at a yield in
excess of the applicable yield restrictions imposed by said
arbitrage regulations on such investments after taking into
account any applicable "temporary periods" or "minor portion"
made available under the federal arbitrage regulations. Money in
the Liquor Store Fund shall not be invested in obligations or
deposits issued by, guaranteed by or insured by the United States
or any agency or instrumentality thereof if and to the extent
that such investment would cause the Bonds or any other bonds
payable from the Debt Service Account to be "federally
guaranteed" within the meaning of Section 149(b) of the Internal
Revenue Code of 1986, as amended (the "Code").
9. Covenants as to Maintenance, Rates and Charges,
Sale, Insurance, Etc. The City hereby certifies and represents
to, and covenants and agrees with, the Owners from time to time
of the Bonds as follows:
(a) The City will complete and continue its ownership
and operation.of the Liquor Store as a revenue producing
facility and~convenience, in the manner authorized and
subject to the restrictions imposed by Minnesota Statutes,
the laws of the State of Minnesota, including Minnesota
Statutes, Section 340A.601, relating to elections on the
licensing of intoxicating liquors. The City will maintain
355470.1 9
the Liquor Store, its furnishings, equipment and merchandise
in good condition, and free from all liens, provided that
purchase money liens may be created on merchandise acquired
for resale, or such merchandise may be acquired subject to
liens existing at the time of acquisition. It should be
no~ed that Minnesota Statutes, Section 426.20, would require
the City Council to hold a public hearing as a condition to
appropriating City funds, other than the Liquor Store
revenues themselves, to cover any shortfall of revenues
necessary for operation costs, but this provision shall not
apply to appropriations which may need to be made by the
City in order to complete the Liquor Store and any other
expenses expressly excepted by the foregoing Section of the
Minnesota Statutes. It should also be noted that Minnesota
Statues, Section 340A.602, requires that if the Liquor Store
operates at a loss for any two out of any three consecutive
years, the City Council is required to conduct a public
hearing on the question of whether or not the City should
submit to voter referendum the question of the City's
continued operation of the Liquor Store; alternatively, a 5%
voter petition may also call a referendum on that question
in those circumstances.
(b) If any properties constituting capital assets of
the Liquor Store shall be sold and disposed of, it shall be
only at their fair market value, and the proceeds of such
sale or disposition shall be used either to produce other
capital assets for the Liquor Store or deposited into the
Operation and Maintenance Account. No such sale or sales
shall be made at times or prices such as to imperil the
prompt and full payment of the Bonds.
(c) The City will procure and keep in force insurance
on the Liquor Store and the equipment and furnishings
thereof and all stocks of merchandise, protecting against
loss or damage by fire, tornado, windstorm, flood, theft and
all other causes customarily insured against for like
properties. In the event of loss covered by said insurance
policies or bonds, the proceeds shall be used to repair or
restore the damage or to retire Bonds payable from the
revenues of the Liquor Store.
(d) The City will further keep in force a liability
insurance policy (covering~its operation of the Liquor
Store). Said policy shall~.specifically provide for the
payment by the insurance company on behalf of the insured of
all sums which the City shall be obligated to pay by reason
of liability imposed upon it by law for injuries or damage
to persons, other than employees, including liability
imposed by reason of Minnesota Statutes, Section 340A.801.
355470.1 1 0
The City shall annually provide to each bondholder
certificates or other suitable documentary proofs showing
that the insurance coverages specified in (c) and (d) of
this paragraph 9 are being maintained.
(e) The City will cause proper and adequate books and
records of account to be kept separate from all other
records of the City, reflecting all receipts and
disbursements relating to the Liquor Store and its
operation. All of said books and records shall be open to
inspection and copying at all reasonable times by the Owners
of the Bonds, and the City will, without cost, furnish
copies of any portions thereof reasonably requested by any
bondholder. The City will cause annual operating statements
to be prepared and an independent audit of the books of the
Liquor Store to be made by a competent public accountant,
and will furnish a copy thereof without cost to each
bondholder.
(f) The Gross and Net Revenues of the Liquor Store
will be used and applied only as prescribed in this
Resolution. The City will at all times maintain operating
policies concerning the purchase and sale of merchandise and
do and perform all other acts and things necessary to assure
that the Net Revenues will be at least sufficient to pay the
principal and interest on the Bonds.
(g) Each and all of the foregoing provisions of this
Resolution which in any way tend to secure or assure prompt
and full payment of the principal of and interest on the
Bonds will be promptly and faithfully performed and carried
out by the City and its officers and agents.
10. Additional Bonds. The City reserves the right to
issue additional bonds payable from the Debt Service Account and
secured by the covenants set forth in this Resolution on the
terms and conditions specified in this paragraph.
(a) Purpose of Bonds; Net Revenues. Additional
bonds may be issued only to finance the acquisition and
betterment of improvements or additions to the Liquor
Store, including necessary maintenance equipment, or to
refund bonds issued for such purposes. All revenues
derived from any such improvements or additions shall
be Net Revenues of the Liquor Store and subject to the
provisions of paragraph 8.
(b) Parity Lien Bonds. Such additional bonds may
be made payable from the Debt Service Account and the
Net Revenues pledged thereto on a parity as to both
355470.1 1 1
principal and interest with all other bonds payable
therefrom only if:
(1) in the last complete fiscal year of the
City immediately preceding the issuance of the
bonds, the amount of Net Revenues was: (A) equal
to not less than 125% of the total amount of
principal and interest to become due in any future
fiscal year on all outstanding bonds payable from
the Debt Service Account and all additional bonds
to be issued, but excluding any bonds to be
refunded by such additional bonds; and (B)
sufficient to pay when due all costs and expenses
payable from the Operation and Maintenance Account
in such last complete fiscal year; provided that
for purposes of this paragraph the Net Revenues
for any fiscal year may be increased to reflect
any increase in the rates and charges which have
been put into effect prior to the issuance of any
additional bonds but were not in effect for all of
such last complete fiscal year; and
(2) the bonds are not made subject to
redemption on a date prior to any outstanding
bonds payable from the Debt Service Account or, if
the bonds are refunding bonds, on a date prior to
the one which the refunded bonds were subject to
redemption;
(3) in the case of refunding bonds, if an
escrow fund is to be established, the City obtains
a report of an independent certified public
accountant that the moneys and securities on hand
in the escrow account are sufficient to pay the
applicable debt service obligations of the
refunded bonds on their stated maturity dates
and/or any date on which such obligations have
been or are to be called for prior redemption and
prepayment; and the City obtains an opinion of
nationally recognized bond counsel stating that
the issuance of the additional bonds will not
cause the interest on any bonds payable from the
Debt Service Account to be includible in gross
income for federal tax purposes; and
(4) the City is not in default under this
Resolution or any other resolution authorizing ~he
issuance of any outstanding bonds payable from the
Debt Service Account.
355470.1 12
11. Subordinate Lien Bonds. Except as provided in
paragraph 10, all additional bonds shall be payable from the Net
Revenues after the requirements of paragraph 8 are met, and such
additional bonds described in this paragraph shall be wholly
junior and subordinate to the pledge and appropriation of such
Net Revenues to the Bonds.
12. Debt Service Coveraqe. It is hereby determined
and reasonably anticipated that the estimated collections of the
revenues available to the Debt Service Account will produce at
least 5% in excess of the amount needed to meet, when due, the
principal of and interest on the Bonds.
13. Records and Certificates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Purchaser, and to the attorneys approving the legality of the
issuance of the Bonds, certified copies of all proceedings and
records of the City relating to the Bonds and to the financial
condition and affairs of the City, and such other affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Bonds as the
same appear from the books and records under their custody and
control or as otherwise known to them, and all such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representations of the City as to the
facts recited therein.
14. Tax-Exempt Bond Covenants. The City covenants and
agrees with the Owners from time to time of the Bonds that the
City will not use the proceeds of the Bonds or the Project, or
cause or permit the same to be used, in such a manner, and will
not take or permit to be taken by any of its officers, employees,
or agents any action, which would (a) cause the interest on the
Bonds to become subject to taxation under the Internal Revenue
Code of 1986, as amended (the "Code"), or (b) cause the Bonds to
be "private activity bonds" within the meaning of Sections 103
and 141 through 150 of the Code, and regulations issued
thereunder, as now existing or as hereafter amended or proposed
and in effect at the time of such action, and that the City will
take, or it will cause to be taken, all affirmative actions
within its power which may be necessary to insure that such
interest will not become subject to income taxation and that the
Bonds will not be private activity bonds under the Code.
In particular, but without limitation, the City covenants to
forebear the implementation, effectuation or enforcement
and all contracts or other agreements respecting the Project, or
any property benefitted thereby or assessed with respect thereto,
which the City may now or in the future have with users,
managers, developers, contractors, owners or any other person or
355470.1 13
parties to the extent that such implementation, effectuation or
enforcement would (individually or in the aggregate) cause the
Bonds to become such a "private activity bonds," and to said
limited extent the City would and hereby does (solely for the
benefit of the Owners of the Bonds) disavow any and all such
provisions, entitlements and enforcements which would or could
become so offending.
Without limitation of the foregoing, the City shall not
enter into any lease, use agreement, management or operation
contract or other agreement respecting the Project which would
adversely affect the exemption from federal income tax of the
interest on the Bonds, taking into account and observing the
requirements of Revenue Procedure 97-13 of the Internal Revenue
Service and any similar or other applicable revenue procedures or
guidelines relating to leases, management contracts and service
contracts involving facilities financed with tax-exempt
obligations.
15. Tax Exempt Status of the Bonds; Rebate. The City
shall comply with requirements necessary under the Code to
establish and maintain the exclusion from gross income under
Section 103 of the Code of the interest on the Bonds, including
without limitation (1) requirements relating to temporary periods
for investments, (2) limitations on amounts invested at a yield
greater than the yield on the Bonds, and (3) the rebate of excess
investment earnings to the United States if the Bonds (together
with other obligations reasonably expected to be issued and~
outstanding at one time in this calendar year) exceed the small-
issuer exception amount of $5,000,000. For purposes of
qualifying for the small issuer exception to the federal
arbitrage rebate requirements, the City hereby finds, determines
and declares that the aggregate face amount of all tax-exempt
bonds (other than private activity bonds) issued by the City (and
all subordinate entities of the City) during the calendar year in
which the Bonds are issued and outstanding at one time is not
reasonably expected to exceed $5,000,000, all within the meaning
of Section 148(f) (4) (D) of the Code.
16. Designation of Qualified Tax-Exempt Obliqations.
The City hereby designates the Bonds as a "qualified tax-exempt
obligations" within the meaning of Section 265(b) (3) of the Code,
the City hereby represents that:
(a) the reasonably anticipated amount of tax-exempt
obligations (other than private activity bonds, treating
qualified 501(c) (3) bonds as not being private activity
bonds) which will be issued by the City (and all entities
subordinate to, or treated as one issuer with, the City)
during calendar year 1997 will not exceed $10,000,000; and
355470.1 14
(b) not more than $10,000,000 of obligations issued or
to be issued by the City during calendar year 1997 have been
designated for purposes of Section 265(b) (3) of the Code.
The City shall use its best efforts to comply with any federal
procedural requirements which may apply in order to effectuate
the designation made by this paragraph.
17. Defeasance. When any obligation of the Bonds have
been discharged as provided in this paragraph, all pledges,
covenants and other rights granted by this Resolution to the
registered owner of the Bonds (with respect to the obligation
thereof so defeased) shall, to the extent permitted by law,
cease. The City may at any time discharge any or all of such
obligation(s) with respect to the Bonds, subject to the
provisions of law now or hereafter authorizing or regulating such
action, by depositing irrevocably in escrow, with a suitable
institution qualified by law as an escrow agent for this purpose,
cash or securities which are backed by the full faith and credit
of the United States of America, bearing interest payable at such
times and at such rates and maturing on such dates and in such
amounts as shall be required and sufficient, subject to sale
and/or reinvestment in like securities, to pay said
obligation(s), which may include any interest payment on such
Bonds and/or principal amount due thereon at a stated maturity
(or if irrevocable provision shall have been made for permitted
prior redemption of such principal amount, at such earlier
redemption date).
18. Compliance With Reimbursement Bonds Requlations.
With respect to the Liquor Store, the City has complied and will
continue to comply with the "Reimbursement Regulations,, provided
in United States Treasury Regulations Section 1.150-2. In
particular, except where the following may not be required by
said Regulations (e.g., with respect to certain "preliminary
expenditures"), to the extent that any of the proceeds of the
Bonds will be used to reimburse the City for a cost of the Liquor
Store theretofore paid and temporarily financed by the City out
of other City funds, prior to the initial payment thereof (or
within applicable time limits thereafter) the City has made or
will have made a duly qualifying statement of its official intent
to bond for such costs, and will thereafter comply with the
requirements of the Reimbursement Regulations (e.g., the
requirements applicable to the reimbursement allocation
~hereunder); otherwise, the proceeds of the Bonds are to be used
~or initial payment, and not for such reimbursement, of costs of
the Liquor Store.
19. No Continuinq Disclosure Undertaking. Based upon
the representations made by the Purchaser in the Bond Purchase
355470.1 15
Agreement and upon the fact that the authorized denomination of
each of the Bonds exceeds $100,000, Rule 15c2-12(b) (5) of the
Securities and Exchange Commission, respectin9 continuin~
disclosure, does not apply to the Bonds.
20. Severability. If any section, paragraph or
provision of this Resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this Resolution.
21. Headings. Headings in this Resolution are
included for convenience of reference only and shall not limit or
define the meanin~ of any provision hereof.
Adopted by the Elk River City Council on June 30, 1997.
355470.1 16
CERTIFICATION
I, the undersigned City Clerk of the City of Elk River,
Minnesota, do hereby certify the following:
The fore~oin~ is true and correct copy of a Resolution on
file and of record in the offices of the City, which Resolution
relates to the issuance by the City of its $1,245,000 Liquor
Store Revenue Bonds of 1997. Said Resolution was duly adopted by
the Elk River City Council at a regular or special meeting of the
Council held on June 30, 1997. Said meeting was duly called and
regularly held and was open to the public and was held at the
place at which meetings of the Council are regularly held, a
quorum of the Council bein~ present and actin~ throughout.
Councilmember moved the adoption of the
Resolution, which motion was seconded by Councilmember
A vote being taken on the motion,
the followin~ members of the Council voted in favor of the
Resolution:
and the following voted against the same:
Whereupon said Resolution was declared duly passed and adopted.
The Resolution is in full force and effect and no action has been
taken by the Council which would in any way alter or amend the
Resolution.
WITNESS MY HAND officially as the City Clerk of the City of
Elk River, Minnesota, this day of , 1997.
(SEAL)
City Clerk
City of Elk River, Minnesota
355470.1
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE
CITY OF ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly held at the City Hall in said City on June
30, 1997, at o'clock P.M. for the purpose in part of
authorizing the sale of the City's $1,165,000 General Obligation
Improvement Bonds, Series 1997A.
The following Councilmembers were present:
and the following were absent:
introduced the following
resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE SALE OF
THE CITY'S $1,165,000 GENERAL OBLIGATION
IMPROVEMENT BONDS, SERIES 1997A
A. WHEREAS, the City Council of the City of Elk
River, Minnesota, determines that it is necessary and expedient
to issue the City's $1,165,000 General Obligation Improvement
Bonds, Series 1997A (the "Bonds"), to finance the assessable
public improvement projects described in the attached schedule,
all of which have been duly ordered by the Council pursuant to
and in accordance with the provisions of Minnesota Statutes,
Chapter 429; and
B. WHEREAS, the City has retained Springsted
Incorporated, in Saint Paul, Minnesota ("Springsted"), as its
independent financial advisor and is therefore authorized to sell
these obligations by a competitive negotiated sale in accordance
with Minnesota Statutes, Section 475.60, Subdivision 2(9); and
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Elk River, Minnesota, as follows:
1. Authorization; Findinqs. The Council hereby
authorizes Springsted to solicit bids for the Competitive
negotiated sale of the Bonds.
~56~29.1
2. Meetinq; Bid Opening. The Council shall meet at
the time and place specified in the Terms of Proposal attached
hereto and made a part hereof for the purpose of considering
sealed bids for and awarding the sale of the Bonds.
3. Terms of Proposal. The terms and conditions of
the Bonds are set forth in the "Terms of Proposal" attached
hereto.
4. Official Statement. The City officials are hereby
authorized to cooperate with Springsted in the preparation of an
official statement for the Bonds and to execute and deliver it on
behalf of the City upon its completion.
The motion for the adoption of the foregoing resolution
was duly seconded by Councilmember and, after
full discussion thereof and upon a vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted.
356329.1 2
City of Ell< River, Minnesota
General Obligation Improvement Bonds, Series 1997A
Project Listing
Less: Revenues Assessments For Debt Service
Bond Assessments
Project Internal Prepaid Proceeds Project by Interest First
Project Costs* Funds Assessments Required Assessments Term Term Rate Filed Collection
(l) (2) (3) (4) (5) (6) (7) (6) (9) (~0) (~)
Joplin Street South 202,376 (101,188) 101,188 101,188 101,188 3 Years 6.50% 12-1-97 1998
Orono Lake Third 361,243 361,243 361,243
(a) 116,400 10 Years 6.50% 12-1-97 1999
(b) 244,843 15 Years 6.50% 12-1-97 1998
Lowell Street Improvements 80,009 (47,434) (13,188) 19,387 19,387
(a) 15,180 10 Years 6.50% 12-1-97 1998
(b) 4,207 5 Years 6.50% 12-1-97 1998
Riverview & Macon 490,300 (24,000) 466,300 466,300
(a) 233,000 3 Years 6.50% 12-1-97 1998
(b) 233,300 10 Years 6.50% 12-1-97 1998
Joplin 185th Int. & Frontage 405,000 (162,907) (23,866' 218,227 242,093 242,093 10 Years 8.00% 3-1-97 1997
Total 1,538,928 (335,529) (37,054) 1,166,345 1,190,211 1,190,211
Less: Rounding (1.345)
Total Series 1997A Bonds $1,165,000
* Includes costs of Issuance and discount.
Prepared by: Springsted Incorporated (6/24/97) ELKRIVER.XLS
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$1,165,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1997A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, July 28, 1997, until 10:30 A.M., Central
Time, at the offices of SpringSted Incorporated, 85 East Seventh Place, Suite 100, 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 6.00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 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 (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Spdngsted prior to the time of sale specified above. Proposals may also. be filed electronically
via PARITY, in accordance with PARITY Rules of Participation and the Terms of Proposal,
within a one-hour period prior to the time of sale established above, but no Proposals will be
received after that time. If provisions in the Terms of Proposal conflict with the PARITY Rules
of Participation, the Terms of Proposal shall control. The normal fee for use of PARITY may be
obtained from PARITY and such fee shall be the responsibility of the bidder. For further
information about PARITY, potential bidders may contact PARITY at 500 Main Street,
Suite 1010, Fort Worth, TX 76102, telephone (817) 885-8900. Neither the City nor Springsted
Incorporated assumes any liability if there is a malfunction of PARITY. 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 of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated August 1, 1997, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing August 1, 1998. 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:
1999 $180,000 2003 $80,000 2007 $75,000 2011 $15,000
2000 $200,000 2004 $75,000 2008 $50,000 2012 $15,000
2001 $190,000 2005 $75,000 2009 $25,000 2013 $15,000
2002 $ 80,000 2006 $75,000 2010 $15,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds, provided that no serial bond may mature on or after the first mandatory
sinking fund redemption date of any 'term bond. All term bonds shall be subject to mandatory
sinking fund redemption and must conform to the maturity schedule set forth above at a price of
-i-
par plus accrued interest to the date of redemption. In order to designate term bonds, the
proposal must specify "Last Year of Serial Maturities" and "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 matudng 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, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. 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 special
assessments against benefited property. The proceeds will be used to finance various
improvements within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $1,153,350 and accrued interest on the total principal
amount of the Bonds. Propos. als shall be accompanied by a Good Faith D, eposit ("Deposit") in
the form of a certified or cashier's check or a Financial Surety Bond in the:'.~mount of $11,650,
payable to the order of the City. If a check is used, it must accompany each 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
-ii-
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The Issuer will deposit the check of the purchaser, the amount of which will be deducted at
settlement 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 Issuer. No proposal
can be withdrawn or amended after the time set for receiving proposals unless the meeting of
the Issuer scheduled for award of the Obligations is adjourned, recessed, or continued to
another date without award of the Obligations having been made. Rates shall be in integral
multiples of 5/100 or 1/8 of 1%. Rates must be in 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 which 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
V~thin 40 days following the date of their award, the Bonds will be delivered without cost to the
pOrchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Briggs and Morgan,
Professional Association, of Saint Paul and 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 which shall be received at the offices of the City
or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms
of payment for the Bonds shall have 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
On the date of the actual issuance and delivery of the Bonds, the City will execute and deliver a
Continuing Disclosure Undertaking whereunder the City will covenant to provide, or cause to be
provided, annual financial information, including audited financial statements of the City, and
notices of certain material events, as specified in and required by SEC Rule 15c2-12(b)(5).
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,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 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 up to 50 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 June 30, 1997 BY ORDER OF THE CITY COUNCIL
/si Sandra Thackeray
Clerk
-iv-
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
I, the undersigned, being the duly qualified and acting
City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY
that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that
the same is a full, true and complete transcript of the minutes
of a meeting of the City Council of said City, duly called and
held on the date therein indicated, insofar as such minutes
relate to the City's $1,165,000 General Obligation Improvement
Bonds, Series 1997A.
WITNESS my hand this day of ,
1997.
City Clerk
~56329.1
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE
CITY OF ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly held at the City Hall in said City on June
30, 1997, at o'clock P.M. for the purpose in part of
authorizing the sale of the City's $335,000 General Obligation
Water Revenue Bonds, Series 1997B.
The following Councilmembers were present:
and the following were absent:
introduced the following
resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE SALE OF
THE CITY'S $335,000 GENERAL OBLIGATION
WATER REVENUE BONDS, SERIES 1997B
A. WHEREAS, the City Council of the City of Elk
River, Minnesota, determines that it is necessary and expedient
to issue the City's $335,000 General Obligation Water Revenue
Bonds, Series 1997B (the "Bonds"), to finance water main
improvements on Highland Avenue; and
B. WHEREAS, the City has retained Springsted
Incorporated, in Saint Paul, Minnesota ("Springsted"), as its
independent financial advisor and is therefore authorized to sell
these obligations by a competitive negotiated sale in accordance
with Minnesota Statutes, Section 475.60, Subdivision 2(9); and
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Elk River, Minnesota, as follows:
356300.1
1. Authorization; Findinqs. The Council hereby
authorizes Springsted to solicit bids for the competitive
negotiated sale of the Bonds.
2. Meetinq; Bid OpeninG. The Council shall meet at
the time and place specified in the Terms of Proposal attached
hereto and made a part hereof for the purpose of considering
sealed bids for and awarding the sale of the Bonds.
3. Terms of Proposal. The terms and conditions of
the Bonds are set forth in the "Terms of Proposal" attached
hereto.
4. Official Statement. The City officials are hereby
authorized to cooperate with Springsted in the preparation of an
official statement for the Bonds and to execute and deliver it on
behalf of the City upon its completion.
The motion for the adoption of the foregoing resolution
was duly seconded by Councilmember and, after
full discussion thereof and upon a vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted.
356300.1 2
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF, PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$335,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 1997B
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, July 28, 1997, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, 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 6:00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 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 (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. Proposals may also be filed electronically
via PARITY, in accordance with PARITY Rules of Participation and the Terms of Proposal,
within a one-hour period prior to the time of sale established above, but no Proposals will be
received after that time. If provisions in the Terms of Proposal conflict with the PARITY Rules
of Participation, the Terms of Proposal shall control. The normal fee for use of PARITY may be
obtained from PARITY and such fee shall be the responsibility of the bidder. For further
information about PARITY, potential bidders may contact PARITY at 500 Main Street,
Suite 1010, Fort Worth, TX 76102, telephone (817) 885-8900. Neither the City nor Springsted
Incorporated assumes any liability if there is a malfunction of PARITY. 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 of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated August 1, 1997, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1998. 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:
1998 $35,000 2002 $30,0~b 2005 $35,000
1999 $25,000 2003 $35,000 2006 $40,000
2000 $30,000 2004 $35,000 2007 $40,000
2001 $30,000
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
-i-
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, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. 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 net
revenues of the City's water utility. The proceeds will be used to finance improvements to the
City's water utility.
TYPE OF PROPOSALS
Proposals shall be for not less than $331,650 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 $3,350, payable to
the order of the City. If a check is used, it must accompany each 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 requirb'ment.
The City will deposit the check of the purchaser, the amount of which will be deducted at
settlement 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 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.
-ii-
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 which the City determines to have failed to comply
with the terms herein.
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 at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Briggs and Morgan,
Professional Association, of Saint Paul and 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 which shall be received at the offices of the City
or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms
of payment for the Bonds shall have 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
On the date of the actual issuance and delivery of the Bonds, the City will execute and deliver a
Continuing Disclosure Ul~dert~king whereunder the City will covenant to provide, or cause to be
provided, annual finar~cial information, including audited financial statements of the City, and
notices of certain material events, as specified in and required by SEC Rule 15c2-12(b)(5).
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,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, teleph?ne (612) 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 up to 25 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 June 30, 1997
BY ORDER Of THE CITY COUNCIL
Is~ Sandra Thackeray
Clerk
- iv -
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
I, the undersigned, being the duly qualified and acting
City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY
that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that
the same is a full, true and complete transcript of the minutes
of a meeting of the City Council of said City, duly called and
held on the date therein indicated, insofar as such minutes
relate to the City's $335,000 General Obligation Water Revenue
Bonds, Series 1997B.
WITNESS my hand this day of ,
1997.
City Clerk
356300.1
Recommendations
For
City of Elk River, Minnesota
$1,165,000
General Obligation Improvement Bonds, Series 1997A
$335,000
General Obligation Water Revenue Bonds, Series 1997B
Presented to:
Mayor Hank Duitsman
Members, City Council
Mr. Patrick Klaers, City Administrator
Ms. Lori Johnson, Finance Director
Elk River City Hall
13065 Orono Parkway
Elk River, MN 55330-0490
Study No.: E0894.A3R2
SPRINGSTED Incorporated
June 25, 1997
SPRINGSTED
Public Finance Advisors
RECOMMENDATIONS
Re:
Recommendations for the Issuance of:
$1,165,000 General Obligation Improvement Bonds, Series 1997A
("the Series 1997A Bonds")
$ 335,000 General Obligation Water Revenue Bonds, Series 1997B
("the Series 1997B Bonds")
We respectfully request your consideration
issues.
We recommend the following for the bonds:
1. Action Requested
2. Sale Date and Time
Authority and Purpose for the Bond
Issues
4. Principal Amount of Offerings
5. Repayment Terms
6. Term Bond Provision
of our recommendations for the above-named
To establish the date and time of receiving
bids and establish the terms and conditions
of the offering.
Monday, July 28, 1997, at 10:30 A.M. with
award by the City Council at 6:00 P.M. of
that same day.
The Series 1997A Bonds are being issued
pursuant to Minnesota Statutes, Chapters
429 and 475. Proceeds of this issue are
being used to finance various improvement
projects within the City.
The Series 1997B Bonds are being issued
pursuant to Minnesota Statutes, Chapters
444 and 475. Proceeds of this issue are
being used to finance the installation of a
watermain addition to the Highland Road
area.
Series 1997A Bonds - $1,165,000
Series 1997B Bonds - $335,000
The Series 1997A Bonds will mature
annually each February 1, 1999 through
2013. Interest on the Series 1997A Bonds
will be payable semi-annually each
February 1 and August 1, commencing
August 1, 1998.
The Series 1997B Bonds will mature
annually each February 1, 1998 through
2007. Interest on the Series 1997B Bonds is
due semi-annually each February 1 and
August 1, commencing February 1, 1998.
For the Series 1997A Bonds, we have
included a provision which 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
City of Elk River, Minnesota
June 25, 1997
7. Sources of Payment and Payment Cycles
8. Prepayment Provisions
9. Credit Rating Status
10. Bank Qualification
11. Rebate Requirements
12. Bona Fide Debt Service Fund
provision because the length of the issue is
too short to benefit from the term bond
provision. The advantage to the underwriter
is that term bonds provide a large block of
bonds which is 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 Series 1997A
Bonds are being offered on a competitive bid
basis and awarded on the lowest true
interest cost, the City will award the
Series 1997A Bonds to the best bid
regardless of whether term bonds are
chosen or not.
The sources of payment and payment cycles
for the issues are discussed in the
Discussion section of these
recommendations.
The Series 1997A and the Series 1997B
Bonds maturing on or after February 1, 2006
will be callable on February 1, 2005, and on
any day thereafter, at a price of par plus
accrued interest.
The City is currently rated "Baal" by
Moody's Investors Service. These issues
require a rating application to assure
continuation of the rating.
The City does not expect to issue over
$10,000,000 in tax-exempt obligations in
1997; therefore these issues are eligible for
bank-qualification. Issues which are
bank-qualified receive slightly lower interest
rates than issues which are not bank-
qualified.
Proceeds of the obligations are subject to
the federal arbitrage rebate requirements.
However, the City does not expect to issue
over $5,000,000 in tax-exempt financing in
1997 and is therefore exempt from rebating
arbitrage earnings to the federal government
if all proceeds from the Issues are expended
within three years.
The City must maintain a bona fide debt
service fund for each of the issues or be
subject to yield restriction. A bona fide debt
service fund is a fund for which there is an
Page 2
City of Elk River, Minnesota
June 25, 1997
13. Economic Life
14. Federal Reimbursements Regulations
15, Continuing Disclosure
16. Attachments
service fund is a fund for which there is an
equal matching of revenue to debt service
expense, with a carry-over permitted equal
to the greater of the investment earnings in
the fund during that year or 1/12 of the debt
service of that year.
The average life of the obligations cannot
exceed 120% of the economic life of the
projects to be financed. These issues are
within the economic life requirements.
Federal reimbursement regulations require
the City make a declaration, within 60 days
of 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.
The new SEC rules require the City to
undertake an annual update of its Official
Statement information and report any
material events to the national repositories.
Springsted currently provides continuing
disclosure services for the City's
Series 1996A and Series 1996B issues. We
have forwarded to City staff an amendment
to the agreement for continuing disclosure
monitoring services, if the City desires
Springsted to provide these services for
these new issues.
Project Listing - Series 1997A Bonds
Assessment Schedule - Series 1997A Bonds
Debt Service Schedule - Series 1997A
Bonds
Debt Service Schedule - Series 1997B
Bonds
Terms of Proposal
DISCUSSION
The Series 1997A Bonds
The Series 1997A Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and
475. Proceeds of the Series 1997A Bonds are being used to finance various improvement
projects within the City. A listing of these projects is shown on page 5. The City expects to file
assessments totaling $948,118 of principal in the fall of 1997 for first collection in 1998. The
City has already filed assessments totaling $218,227 of principal for first collection in 1997. The
assessments have been filed in terms ranging from three to ten years with interest on the
Page 3
City of Elk River, Minnesota
June 25, 1997
unpaid balance of assessments charged at a rate of 6.50% for all projects except the Joplin
185th Int. and Frontage Road, where interest on the unpaid balance of assessments is being
charged at a rate of 8.0%. Pages 6 through 8 show the assessment schedules for these
projects. First-half collections of special assessments will be used to make the August 1
interest payment in the year of collection, and second-half collections of special assessments
will be used to make the subsequent February 1 principal and interest payment. Page 9 shows
the estimated debt service for this issue.
The Series 1997B Bonds
The Series 1997B Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and
475. Proceeds of the Series 1997B Bonds are being used to finance the installation of a
watermain addition to the Highland Road area. The Bonds have been amortized over ten years
to provide even annual debt service on this issue. In addition to its general obligation pledge,
the City also pledges net revenues from its Water Utility for payment on this issue. The
February 1, 1998 principal and interest payment will be made from net revenues of the Water
Utility collected in 1997. Thereafter, net revenues from the Water Utility will be used to make
each August 1 interest payment in the year of collection and the subsequent February 1
principal and interest payment. Page 10 shows the estimated debt service on this issue.
Respectfully submitted,
SPRINGSTED Incorporated
tmw
Provided to Staff:
a) Summary of Continuing Disclosure Requirements
b) Rebate and Continuing Disclosure Contracts
Page 4
City of Elk River, Minnesota
General Obligation Improvement Bonds, Sedes 1997A
Project Listing
~::~::~¥~ ~...~ :::~ ~::~...~::~:: :::::::::::::::::::::::::::::::::::::::::: :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::~
Joplin Strut South 202,376 (101,188) 101,188 101,188 101,188 3 Years 6.50% 12-1-97 1998
Orono Lake Third ~1,243 361,243 ~1,243
(a) 116,400 10 Years 6.50% 12-1-97 1999
(b) 244,~3 15 Years 6.50% 12-1-97 1998
Lowell Street Improvements 80,00~ (47,4~) (13,188) 19,387 19,387
(a) 15,180 10 Years 6.50% 12-1-97 1998
(b) 4,207 5 Years 6.50% 12-1-97 1998
~ive~i~ ~ Macon 4~0,300 (24,000) 4~6,300 46S,300
(a) 233,000 3 Years 6.50% 12-1-97 1998
(b) 233,300 10 Years 6.50% 12-1-97 1998
Joplin 185th Int. J Frontag~ 405,000 (162,907) (23,866) 218,227 242,093 242,093 10 Yearn 8.00% 3-1-97 1997
Total 1,538,928 (335,529) (37,0~) 1,166,345 1,1~0,211 1,190,211
Less: Rounding (1,345)
Total S~ri~s lS~A Bo~ds I1,16S,000
* Includes costs of issuance and discount.
Prepared by: Springsted Incorporated (6/25/97) ELKRIVER.XLS
City of Elk River, Minnesota
General Obligation Inproveaent Bonds, Series 1997A
Prepared June 23, 1~97
By SPRINGSTED Incorporated
PROJECTED ASSESSMENT INCOME
Joplin Street South
Filing Date: 12/ 1/1997
Filing Collect Interest
Year Year Principal @ 6.500% Total
1996 1997
1997 1998
1998 1999
1999 2000
2000 2001
2001 2002
2002 2003
2003 2004
2004 2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2010
2010 2011
2011 2012
TOTALS
33~729 7~136a 40~865
33~729 4~385 38~114
33~730 2~192 35,922
101~188 13,713 114,901
Orono Lake Third (a)
Filing Date: 12/ 1/1997
Interest
Principal @ 6.500% Total
11~640 15,775c 27~415
11~640 6,809 18~449
11,640 6~053 17,693
11,640 5~296 16~936
11~640 4,540 16,180
11,640 3,783 15~423
11,640 3,026 14~666
11,640 2~270 13~910
11,640 1~513 13,153
11,640 757 12,397
116,400 49,822 166~222
Orono Lake Third (b)
FlIlng Date: 12/ 1/1997
Interest
Principal @ 6.500% Total
16,323 17,266b 33,589
16,323 14,854 31~177
16,323 13,793 30,116
16~323 12,732 29,055
16,323 11~671 27,994~
16,323 10,610 26~933
16,323 9~549 25,872
16,323 8,488 24,811
16~323 7,427 23~750
16,323 6~366 22~689
16,323 5,305 21~628
16,323 4~244 20,567
16~323 3~183 19~506
16~323 2~122 18,445
16,321 1~061 17~382
244~843 128~671 373~514
a) Includes interest from fliing
date to 12/31/1998.
c) Includes interest from filing
date to 12/31/1999.
b) Includes interest from filing
date to 12/31/1998.
City of ElK River, Minnesota
General Obligation Inproveaent Bonds, Series 1997A
Prepared June 23, lu97
By SPRINGSTED Incorporated
PROJECTED ASSESSMENT [NCOME
Lowell Street Improvements (a)
Filing Date: 12/ 1/1997
Filing Collect Interest
Year Year Principal @ 6.500% Total
1996 1997
1997 1998
1998 1999
1999 2000
2000 2001
2001 2002
2002 2003
2003 2004
2004 2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2010
2010 2011
2011 2012
TOTALS
1~518 I ~071a
1 ~518 888
1 ~518 789
1 ~518 691
1 ~518 592
1 ~518 493
1 ~518 395
1 ~518 296
1 ~518 197
1 ~518 99
2 ~ 589
2 ~ 406
2 ~ 307
2 209
2 110
2 011
I 913
I 814
I 715
I 617
15~180 5,511 20,691
Lowell Street [mprovements (b)
Filing Date: 12/ 1/1997
Interest
Principal @ 6.500% Total
841 297b 1~138
841 219 1~060
841 164 1~005
841 109 95O
843 55 898
4,207 844 5~051
Riverview & Macon (a)
Filing Date: 12/ 1/1997
Interest
Principal @ 6.500% Total
77,667 16,431c 94,098
77,667 10,097 87,764
77,666 5,048 82,714
233~000 31,576 264,576
a) Includes interest from
date to 12/31/1998.
b) Includes interest from filing
date to 12/31/1998.
c) Includes interest from filing
date to 12/31/1998.
Clty of Elk River,
General Obligation
Minnesota
Inprovement Bonds, Series 1997A
Prepared June 23, lU97
By SPRINGSTED Incorporated
PROJECTED ASSESSMENT INCOME
Filing Collect
Year Year
1996 1997
1997 1998
1998 1999
1999 2000
2000 2001
2001 2002
2002 2003
2003 2004
2004 2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2010
2010 2011
2011 2012
TOTALS
Rlverview & Macon (b)
Filing Date: 12/ 1/1997
Interest
Principal @ 6.500% Total
23,330 16,452b 39,782
23,330 13j648 36~978
23,330 12j132 35,462
23,330 10~615 33,945
23,330 9,099 32,429
23,330 7~582 30,912
23,330 6~066 29,396
23~330 4j549 27,879
23~330 3~033 26,363
23~330 1,516 24,846
233,300 84,692 317,992
Joplin/185th Int. &
Filing Date: 3/
Interest
Principal @ 8.000%
21,823 14~636a
21,823 15~712
21,823 13~966
21,823 12~221
21,823 10~475
21,823 8~729
21,823 6~983
21,823 5~237
21,823 3~491
21~820 1~746
Frontage
1/1997
Total
36 459
37 535
35 789
34 044
32 298
30 552
28 806
27,060
25~314
23j566
218~227 93,196 311,423
- TOTAL - -
PrincipaI Interest
21~823 14~636
175,231 74,365
186,871 73,832
186~871 53j148
75~475 40~675
75~477 35~442
74,634 30j208
74,634 25~030
74,634 19~850
74,631 14,673
52,811 9,494
27,963 6~062
16~323 4,244
16~323 3~183
16j323 2~122
16,321 1,061
1~166,345 408,025
Total
36~459
249~596
260,703
240 019
116 150
110 919
104 842
99 664
94 484
89 304
62.305
34 025
20 567
19 506
18,445
17j382
1~574~370
b) Includes interest from filing
date to 12/31/1998.
a) [ncludes interest from filing
date to 12/31/1997.
City of Elk River, Minnesota
General Obligation Improvement Bonds, Series 1997A
Dated: 8- 1 - 1997
Mature: 2- 1
First Interest: 2- 1-1996
Year of Year of Year of
Levy Collection Mat. Principal
(1) (2) (3) (4)
1996 1997 1998
1997 1998 1999
1998 1999 2(X)0
1999 2000 2001
2000 2001 2002
2001 2002 2003
2002 2003 2004
2003 2004 2005
2004 2005 2006
2005 2006 2007
2006 2007 2008
2007 2008 2009
2008 2009 2010
2009 2010 2011
2010 2011 2012
2011 2012 2013
0
180,000
200,000
190,000
80 000
80 000
75 000
75 000
75 000
75 000
50 000
25 000
15000
15000
15000
15000
Rates Interest
(5) (6)
0.00% 27,630
4.40% 55,260
4.50% 47,340
4.60% 38,340
4.70% 29,600
4.80% 25,840
4.85% 22,000
4.95% 18,363
5.00% 14,650
5.05% 10,900
5.15% 7,113
5.25% 4,538
5.30% 3,225
5.35% 2,430
5.40% 1,628
5.45% 818
TOTALS: 1,165,000 309,673
Prepared June 18, 1997
By SPRINGSTED Incorporated
Annual
Total Surplus
Principal 105% Assessment (Net
& Interest of To{al Income Requirement)
(7) (8) (9) (10)
27 630
235 260
247 340
228 340
109600
105 840
97 000
93 363
89 650
85 900
57,113
29,538
18,225
17,430
16,628
15,818
1,474,673
29,012
247,023
259,707
239,757
115,080
111,132
101,850
98,031
94 133
90 195
59 968
31 014
19136
18 302
17 459
16608
36,459
249,596
260,703
240,019
116,150
110,919
104,842
99,664
94,484
89,304
62,305
34,025
19,506
18,445
17,382
1,574,370
7,448
2,573
996
262
1,070
(213)
2,992
1,633
352
(891)
2,337
3,011
1,431
1,2O5
986
774
* Costs of issuance and the underwriter's discount are included in the project costs.
Interest rates are estimates; changes may cause significant alterations of this schedule.
The actual underwriter's discount bid may also vary.
City of Elk River, Minnesota
General Obligation Water Revenue Bonds, 1997B
Prepared June 17, 1997
By SPRINGSTED Incorporated
Dated: 8- 1 -1997
Mature: 2- 1
First Interest: 2- 1 - 1998
Year of Year of
Revenue Mat. Principal
(1) (2) (3)
1997 1998 35,000
1998 1999 25,000
1999 2000 30,000
2000 2001 30,000
2001 2002 30,000
2002 2003 35,000
2003 2004 35,000
2004 2005 35,000
2005 2006 40,000
2006 2007 40,000
TOTALS: 335,000
Rates
(4)
Total
Principal 105%
Interest & Interest of Total
(5) (6) (7)
4.30o/o 7,938 42,938 45,084
4.40o/0 14,370 39,370 41,339
4.50O/O 13,270 43,270 45,434
4.60O/O 11,920 41,920 44,016
4.70O/O 10,540 40,540 42,567
4.80% 9,130 44,130 46,337
4.85% 7,450 42,450 44,573
4.95% 5,753 40,753 42,790
5.00o/o 4,020 44,020 46,221
5.05% 2,020 42,020 44,121
86,410 421,41 0 442,481
Issue Statistics:
Bond Years:
1,772.50
Annual Interest: 86,410
PlUs DisCounb: ' · 3,350
Net Interest: 8g,767
T.I.C. Rate: 5.091%
N.I.C. Rate: 5;064%
Issue 'CompOSition~
PrOject' COsts 346,000
(30,000)
15,650
Underwriter's DiScount 3,.350
Total Series 1997B Bonds
335,000
Interest rates are estimates; changes may cause significant
alterations of this schedule.
The actual underwriter's discount bid may also vary.
Page 10
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OFPROPOSAL
$1 ,'165,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1997A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, July 28, 1997, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, 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 6.00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 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 (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. Proposals may also be filed electronically
via PARITY, in accordance with PARITY Rules of Participation and the Terms of Proposal,
within a one-hour period prior to the time of sale established above, but no Proposals will be
received after that time. If provisions in the Terms of Proposal conflict with the PARITY Rules
of Participation, the Terms of Proposal shall control. The normal fee for use of PARITY may be
obtained from PARITY and such fee shall be the responsibility of the bidder. For further
information about PARITY, potential bidders may contact PARITY at 500 Main Street,
Suite 1010, Fort Worth, TX 76102, telephone (817) 885-8900. Neither the City nor Springsted
Incorporated assumes any liability if there is a malfunction of PARITY. 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 of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated August 1, 1997, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing August 1, 1998. 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:
1999 $180,000 2003 $80,000 2007 $75,000 2011 $15,000
2000 $200,000 2004 $75,000 2008 $50,000 2012 $15,000
2001 $190,000 2005 $75,000 2009 $25,000 2013 $15,000
2002 $ 80,000 2006 $75,000 2010 $15,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds, provided that no serial bond may mature on or after the first mandatory
sinking fund redemption date of any term bond. All term bonds shall be subject to mandatory
sinking fund redemption and must conform to the maturity schedule set forth above at a price of
Page 11
par plus accrued interest to the date of redemption. In order to designate term bonds, the
proposal must specify "Last Year of Serial Maturities" and "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, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. 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 special
assessments against benefited property. The proceeds will be used to finance various
improvements within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $1,153,350 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 $11,650,
payable to the order of the City. If a check is used, it must accompany each 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
Page 12
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The Issuer will deposit the check of the purchaser, the amount of which will be deducted at
settlement 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 Issuer. No proposal
can be withdrawn or amended after the time set for receiving proposals unless the meeting of
the Issuer scheduled for award of the Obligations is adjourned, recessed, or continued to
another date without award of the Obligations having been made. Rates shall be in integral
multiples of 5/100 or 1/8 of 1%. Rates must be in 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 which 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 at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Briggs and Morgan,
Professional Association, of Saint Paul and 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 which shall be received at the offices of the City
or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms
of payment for the Bonds shall have 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.
Page 13
CONTINUING DISCLOSURE
On the date of the actual issuance and delivery of the Bonds, the City will execute and deliver a
Continuing Disclosure Undertaking whereunder the City will covenant to provide, or cause to be
provided, annual financial information, including audited financial statements of the City, and
notices of certain material events, as specified in and required by SEC Rule 15c2-12(b)(5).
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,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 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 up to 50 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 June 30, 1997 BY ORDER OF THE CITY COUNCIL
~si Sandra Thackeray
Clerk
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
$335,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 1997B
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, July 28, 1997, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, 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 6:00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 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 (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. Proposals may also be filed electronically
via PARITY, in accordance with PARITY Rules of Participation and the Terms of Proposal,
within a one-hour period prior to the time of sale established above, but no Proposals will be
received after that time. If provisions in the Terms of Proposal conflict with the PARITY Rules
of Participation, the Terms of Proposal shall control. The normal fee for use of PARITY may be
obtained from PARITY and such fee shall be the responsibility of the bidder. For further
information about PARITY, potential bidders may contact PARITY at 500 Main Street,
Suite 1010, Fort Worth, TX 76102, telephone (817) 885-8900. Neither the City nor Springsted
Incorporated assumes any liability if there is a malfunction of PARITY. 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 of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated August 1, 1997, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1998. 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:
1998 $35,000 2002 $30,000 2005 $35,000
1999 $25,000 2003 $35,000 2006 $40,000
2000 $30,000 2004 $35,000 2007 $40,000
2001 $30,000
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
Page 15
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, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. 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 net
revenues of the City's water utility. The proceeds will be used to finance improvements to the
City's water utility.
TYPE OF PROPOSALS
Proposals shall be for not less than $331,650 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 $3,350, payable to
the order of the City. If a check is used, it must accompany each 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 City will deposit the check of the purchaser, the amount of which will be deducted at
settlement 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 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.
Page 16
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 which the City determines to have failed to comply
with the terms herein.
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 at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Briggs and Morgan,
Professional Association, of Saint Paul and 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 which shall be received at the offices of the City
or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms
of payment for the Bonds shall have 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
On the date of the actual issuance and delivery of the Bonds, the City will execute and deliver a
Continuing Disclosure Undertaking whereunder the City will covenant to provide, or cause to be
provided, annual financial information, including audited financial statements of the City, and
notices of certain material events, as specified in and required by SEC Rule 15c2-12(b)(5).
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,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 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 up to 25 copies
of the Official Statement and the addendum or addenda described above. The City designates
Page 17
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 June 30, 1997
BY ORDER OF THE CITY COUNCIL
/si Sandra Thackeray
Clerk
Pac' 18