The URL can be used to link to this page

5.1. SR 05-10-1999 rll ---'\) ( )j tit{ Item #5.1. River MEMORANDUM TO: Mayor & City Council -A~ FROM: Lori Johnson, Finance Director DATE: May 10, 1999 SUBJECT: Resolution Providing for the Sale of the City's $5,725,000 General Obligation Bonds, Series 1999A . Attached are the Recommendations and resolution related to issuing $5,725,000 of general obligation improvement bonds for the East Elk River Water and Sewer Improvement Project which is currently underway. The resolution calls for setting the sale for June 28 so that bond proceeds will be available some time in July. This bond issue does not include funds for any street or storm sewer project costs. Those will be included in a future bond Issue. The water and sewer project costs to be financed total $6,080,821. This includes construction, engineering, bond issuance, and other related overhead costs, excluding capitalized interest which is necessary because special assessment payments will not be received until July 2000. These bonds are being financed through several sources including revenues from Tax Increment Financing District 19, water and sewer fund contributions, and primarily, special assessments. The water fund has chosen to make a portion of its contribution up-front, thereby reducing the bond issue size and reducing the interest cost. This $500,000 up-front contribution reduces the total bond issue to $5,725,000. Please refer to Page 7 of the Recommendations for additional information on the project costs and sources of revenues. This is a general obligation bond which means that the city has authority and an obligation to levy property taxes if the other sources of revenue do not meet debt service. Although the bond documents require the certification of a tax levy, at this time it is expected that many, if not all, of the levies will be canceled. Cancellation of the levies will depend on the flow and timing of revenues. . This bond issue has been structured based on numerous assumptions; the assumptions are necessary as not all of the final revenue amounts and timing 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 . TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 . . . of the receipt of the revenues are known at this time. The assumptions made include tax increment revenues based on construction values and a build-out schedule provided by the developer, green acre deferrals of $420,420, of which $207,600 would be deferred seven years and $212,820 deferred 14 years, Trott Brook special assessment prepayments based on a seven year build-out as estimated by the developer, and timely payment of all special assessments. Any changes in these assumptions will, of course, affect the revenue stream available to meet debt service. The most important issue is that the construction of the commercial properties within TIF District 19 remain on schedule and at the values indicated by the developer. Page 13 of the Recommendations indicates the property tax levy which will be certified to the county auditor as a requirement of the bond issuance. Based on preliminary estimates, a small portion (principal of approximately $145,000) may be required to be financed through property tax levies if other sources do not become available. This tax levy must be identified as a revenue source because estimated deferrals in special assessment payments cause a cash flow shortage. If sufficient revenues are available to meet debt service, the property tax levies may be cancelled by the council on an annual basis. The first scheduled levy is for collection in the year 2000. This levy will be reviewed during the adoption of the levy resolution in September, 1999, to determine if it can be canceled. This is the largest public improvement bond that the city has issued. In the past several years of working on this project, there have been numerous discussions regarding the possibility of tax levies to meet debt service, the bond issue size, and the city's credit rating. The credit rating applied to this issue is very important as it affects the interest rate of the bonds. Moody's, the city's bond rating agency, will be visiting Elk River on June 15 in anticipation of rating this bond issue. At that time a Moody's representative will meet key department heads, the city administrator, the mayor, and other elected officials, after which she will take a tour of the city and the East Elk River development area. This tour is intended to give Moody's an idea of the level of growth in the city, how the growth has been handled, and the city's plans to accommodate future growth. In addition to this on site visit, we will be holding a teleconference with Moody's to provide additional data on the city, its financial condition, and detailed background information on this project. As you know, when Moody's reviews a credit rating, the total debt burden placed on the taxpayers, including city, county and school district debt, is considered. Because of this area's rapid growth there is considerable school debt with anticipation of additional school debt in the near future. The city also has slightly above average debt; however, most of it is special assessment and revenue debt. The city does not have much tax supported debt. The strong possibility of future city debt to facilitate infrastructure improvements necessary for growth will also be a rating consideration. . . . I will be present at Monday's meeting to answer any additional questions you may have regarding this bond issue and the upcoming credit rating review. Action Reauested The City Council is asked to consider the Resolution Providing for the Sale of the City's $5,725,000 General Obligation Bonds, Series 1999A. \ \elkriver \sys \shrdoc \council\gobonds.doc e. 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 h~ld at the City Hall in said City on May 10, 1999, at 6:00 o'clock P.M. for the purpose in part of authorizing the sale of the City's $5,725,000 General Obligation Bonds, Series 1999A. The following Councilmembers were present: and the following were absent: introduced the following resolution and moved its adoption: e RESOLUTION PROVIDING FOR THE SALE OF THE CITY'S $5,725,000 GENERAL OBLIGATION BONDS, SERIES 1999A A. WHEREAS, the City Council of the City of Elk River, Minnesota, determines that it is necessary and expedient to issue the City's $5,725,000 General Obligation Bonds, Series 1999A (the "Bonds"), to finance the assessable and other public improvement projects described in the attached schedule; 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; Findings. The Council hereby authorizes Springsted to solicit bids for the competitive negotiated sale of the Bonds. 2. Meetinq; Bid Openinq. 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 e sealed bids for and awarding the sale of the Bonds. 1045429.1 e. e e 3. Terms of ProDosal. 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 foregoing resolution and, after vote being taken thereon, the The motion for the adoption of was duly seconded by Councilmember full discussion thereof and upon a following voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. 1045429.1 2 . . . CITY OF ELK RIVER, MINNESOTA General Obligation Bonds, Series 1999A Composition of the issue will be determined as follows: Project Costs to be Financed Less: Utility Fund Contribution Capitalized Interest through 2.1~2000 Cost of Issuance (a) Allowance for Discount Bidding (a) Investment Earnings (b) 6,060,621 (500,000) 146,000 N/A N/A (1,621) Total Bond Issue 5,725,000 (a) Included in the project costs to be financed. (b) Investment earnings aflfJ required for project costs. Amount shown here is for rounding purposes. Calculation of Special Assessment Income: Fifteen Year Assessments Amortized Over Seven Years Trott Brook 1,577,820 Fifteen Year Assessments Amortized Over Fifteen Years Trunk Assessments Hohlen Lateral Assessments Interior Industrial Park Road Assessments Subtotal Less: Trott Brook Oversizing Less: Trott Brook 7 Year Assessments Less: Green Acre Deferments Total 15 Year Assessments 4,186,380 207,000 330,000 4,723,380 (275,000) (1,577,820) (420,420) 2,450,140 Deferments Principal amount anticipated to be deferred 7 years Principal amount anticipated to be deferred 15 years Total Deferments 207,600 212.820 420,420 Water Fund Contribution over 15 Years 325,000 Sewer Fund Contribution over 15 Years 175.000 Tax Increment District No. 19 over 13 Years 735,000 Prepared by SPRINGSTED Incorporated 5/3/99 g:\users\brenda\eIKriver\hwy1 O.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 $5,725,000 CITY OF ELK RIVER. MINNESOTA GENERAL OBLIGATION BONDS, SERIES 1999A (BOOK ENTRY ONLy) Proposals for the Bonds will be received on Monday, June 28, 1999, until 10:00 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 (651) 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 (651) 223-3000 or fax (651) 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. 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 July i. 1999, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2000. 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: 2001 2002 2003 2004 $460,000 5380,000 $465.000 $455,000 2005 2006 2007 2008 $455,000 $450,000 $440,000 $280,000 2009 2010 2011 2012 $280,000 $275.000 $275.000 $280,000 2013 2014 2015 $280,000 $285.000 $665.000 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 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. - I _ e. 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 ("OTC"), 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 OTC and its participants. Principal and interest are payable by the registrar to DTe or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTe 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 e The City may elect on February 1, 2006, and on any day thereafter, to prepay Bonds due on or after February 1. 2007. 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, net revenues of the City's water and sewer utilities and tax increment revenues from the City's Tax Increment Financing District No. 19. The proceedS will be used to finance various improvements within the City. TYPE OF PROPOSALS e Proposals shall be for not less than $5,639.125 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 $52,750, payable to the order of the City. If a check is used, it must accompany each proposal. If a Financial Surety Bond ;s 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 purchi?~~r 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. 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.substantivB 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. BONO 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. CUSI? NUMBERS If the Bonds qualify for assignment of CUS1? 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 (651) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds. together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 200 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated May 10, 1999 BY ORDER OF THE CITY COUNCIL Isl Sandra Peine Clerk 51410911:31 AM e. 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 $5,725,000 General Obligation Bonds, Series 1999A. WITNESS my hand this day of e 1999. e City Clerk 1045429.1 3 t ~ . . . Recommendations For City of Elk River, Minnesota $5,725,000 General Obligation Bonds, Series 1999A Presented to: Mayor Stephanie Klinzing Members, City Council Mr. Patrick Klaers, City Administrator Ms. Lori Johnson, Finance Director City of Elk River 13065 Orono Parkway Elk River, MN 55330-0490 Study No.: E0897N3 SPRINGSTED Incorporated May 5, 1999 ~ SPRINGSTED Public Finance Advisors RECOMMENDATIONS . Re: Recommendations for the Issuance of $5,725,000 General Obligation Bonds, Series 1999A INTRODUCTION The City has initiated a substantial expansion of its infrastructure to assist development of approximately 1,000 acres in the east Highway 10 area. These bonds will fund in part this expansion and will be repaid from a variety of revenue sources including special assessments, net revenues of the City's water and sewer utilities, and tax increment revenues from the City's Tax Increment Financing District No. 19. Development within the Highway 10 area has not yet begun. Therefore, assumptions regarding the projected revenue streams being used to repay the bonds are based on build-out projections and other assumptions provided by City staff. The bonds are backed by the City's general obligation pledge to levy ad valorem taxes in the event revenue collections are not received as anticipated. A detailed discussion of the various revenue streams being used to repay the bonds are described in the Discussion section later in these recommendations. To the extent the City does not meet the assumptions in either amount or timing, substantial financial impacts could occur. We recommend the following for the bonds: 1. Action Requested To establish the date and time of receiving bids and establish the terms and conditions of the offering. Monday, June 28,1999 at 10:00 A.M., with award by the City Council at 6:00 P.M. that same day. . 2. Sale Date and Time 3. Authority and Purpose for the Bond Issue The bonds are being issued pursuant to Minnesota Statutes, Chapters 429, 444, 469, and 475. The bonds are being issued to finance various public improvements within the City's new Highway 10 development area. 4. Principal Amount of Offering $5,725,000 5. Term Bonds We have included in the Terms of Proposal a provision to permit the underwriters bidding on the bonds to combine multiple maturities into a single term bond, subject to mandatory redemption on the same maturity schedule provided in the Terms of Proposal. The advantage to the underwriter is that it provides them the flexibility to create a large block of bonds that are more attractive to bond funds and certain pension funds that deal with only larger blocks of bonds. This in turn is a benefit to the City since selling the larger blocks of bonds reduces the risk to the underwriter, allowing them to lower their costs and the interest coupons. Since the bonds are being awarded on a . w' City of Elk River, Minnesota May 5, 1999 . competitive bid basis and awarded on the lowest true interest cost, the City will award the bonds to the best bid regardless of whether term bonds were chosen or not. 6. Repayment Term Principal on the bonds will be repaid each February 1, 2001 through 2015. Interest will be due each February 1 and August 1 beginning February 1, 2000. 7. First Levy and Levy Cycle The sources of payment and payment cycle for the issue is discussed in the Discussion section of these recommendations. 8. Prepayment Provisions The City may elect on February 1, 2006, and on any day thereafter, to prepay bonds due on or after February 1, 2007 at a price of par plus accrued interest. We have provided an aggressive call feature in the event projected revenues for the bonds come in significantly faster or slower than projected, thus allowing the bonds to be called and debt service payments restructured as necessary to coincide with the available revenues. . 9. Credit Rating Comments This issue requires a rating application be made to Moody's Investors Service to assure continuation of the outstanding bond rating of the City. The City is currently rated "8aa1." This issue represents a significant increase in the City's debt. In addition, the local School District is expected to hold a referendum this year in an effort to finance significant new school building projects. We feel it will be important for the City to be proactive with Moody's in presenting the current bond issue. We have currently made plans for a representative of Moody's to visit the City on June 15, 1999 for a two-hour tour of the community, including the new Highway 10 development area being financed by this issue. Approximately one week prior to the sale date, representatives of the City and Springsted will hold a teleconference with Moody's to review, in detail, all aspects of the City including finances, management initiatives, debt and future borrowing and the local economy. . Page 2 o! City of Elk River, Minnesota May 5, 1999 . 10. Federal Treasury Regulations Concerning Tax-Exempt Obligations (a) Bank Qualification (b) Rebate Requirements . (c) Bona Fide Debt Service Fund . This issue is designated as bank qualified. Under Federal Tax Law, financial institutions cannot deduct from income for federal income tax purposes, income expense that is allocable to carrying and acquiring tax-exempt bonds. There is an exemption to this for "bank qualified" bonds, which can be so designated if the issuer does not issue more than $10 million of tax exempt bonds in a calendar year. Issues that are bank qualified receive slightly lower interest rates than issues that are not bank qualified. All tax-exempt issues are subject to the federal arbitrage and rebate requirements, which require all excess earnings created by the financing to be rebated to the U.S. Treasury. The requirements generally cover two categories: bond proceeds and debt service funds. There are exemptions from rebate in both of these categories. Bond proceeds, defined generally as both the original principal of the issue and the investment earnings on the principal, have 6, 18, and 24 month spend down exemption periods. If all of the proceeds are expended during one of those exemption periods, the issuer is exempt from rebate and may retain the excess earnings. The City should be aware that this test is an "actual" test, not one of "reasonable expectations" and you will need to determine if the spend down was met or if rebate may be required. A more complete discussion of rebate is contained in the Arbitrage and Rebate Primer transmitted to your finance staff under separate cover. Springsted can provide rebate calculation services to the City, if the City so desires. An addendum to the current contract between the City and Springsted to include rebate calculation services has been provided to the City staff. The City must maintain a bona fide debt service fund for the bonds or be subject to yield restriction. This requires restricting the investments held in the debt service fund to the yield on the bonds and/or paying back excess investment earnings in the debt service fund to the federal government. A Page 3 City of Elk River, Minnesota May 5, 1999 (d) Economic Ufe bona fide debt service fund is a fund for which there is an equal matching of revenue to debt service expense, with carry over permitted equal to the greater of the investment earnings in the fund during that year or 1/12 the debt service of that year. The average life of the bonds cannot exceed 120% of the economic life of the projects to be financed. The economic life of street and utility improvements is 20 and 40 years, respectively. The average life of the bonds is 8.27 years; therefore the issue is within the economic life requirements. . (e) Federal Reimbursement Regulations Federal reimbursement regulations require the City to make a declaration, within 60 days of the actual payment, of its intent to reimburse itself from expenses paid prior to the receipt of bond proceeds. It is our understanding the City has taken whatever actions are necessary to comply with the federal reimbursement regulations in regards to the bonds. The bonds are subject to the SEC continuing disclosure requirements. The 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 service to the City. We have provided City staff with a contract amendment to include this issue. . 11. Continuing Disclosure . Composition of the Issue Debt Service Schedules Tax Increment Financing District No. 19 Cash Flow Assessment Income Schedules Terms of Proposal 12. Attachments . . . . DISCUSSION . The composition of the bonds is shown on the top of page 7 of these recommendations. A cash contribution of $500,000 will be made by the City from its water enterprise fund to reduce the borrowing amount. Capitalized interest has been included in the principal amount of the issue to make the February 1, 2000 interest payment, which is due prior to the first receipt of special assessments and tax increment revenues. Also shown on page 7 are summaries of the projected revenue streams from special assessments, net revenues of the City's water and sewer utilities and tax increment revenues from the City's Tax Increment Financing District Page 4 . . . City of Elk River, Minnesota May 5, 1999 No. 19 ("TIF 19"). A small portion of the issue ($145,000) is structured to be repaid from a general ad valoren tax levy (see page 13, column 9 for estimated tax levies). However, if all other revenue streams are received, as projected by City staff and the developer, an ad valorem tax levy should not be required for repayment of the bonds. New development within the Highway 10 development area has not yet begun and the projected revenues from special assessments and tax increment revenues are based on a number of assumptions that mayor may not materialize. In the event of revenue shortfalls, the City will be required to use other available City funds or levy general ad valorem taxes to make timely debt service payments on the bonds. Debt service schedules for the bonds are shown on pages 8 through 13. A separate debt service schedule is presented for each source of repayment, followed by a debt service schedule for the total bond issue. The total bond issue is shown on page 8, along with a summary of the sources of revenues pledged to the repayment of the bonds, except general property tax levies. As you will note in column 15 an overall surplus of revenues over debt service requirements is projected if revenues are received as anticipated. Assessment Portion of Bond Issue Pages 16 through 19 show the projection of assessment income. Assessments totaling $4,186,380 were filed on December 3, 1998, with interest accruing beginning on September 1, 1999. The balance of assessments are expected to be filed before September 1, 1999. All assessments will be filed over a term of 15 years with even annual principal payments and interest charged on the unpaid balance at a rate of 1.5% over the rate on the bonds. As noted on page 7 a number of assumptions are being made as to the actual collection of special assessments. First, a total of $420,420 of assessments are expected to be deferred under Minnesota Statutes, Section 273.111, which permits the deferment of assessments on unimproved (unplatted or agricultural) property until such time as the property is developed ("green acres"). At the recommendation of City staff, we have assumed for structuring purposes that $207,600 of the green-acre deferments will be collected after the first seven years and the remaining $212,820 of green-acre deferments will be collected in the last year of the bonds. Second, although all assessments will be filed over a term of 15 years, it is assumed that assessments associated with the Trott Brook development will come much more quickly. Thus, City staff has advised us that the Trott Brook assessments should be projected to be received over seven years instead of the full 15 years. Please note on the assessment income schedules for the green-acre deferments, on pages 18 and 19, the principal amount includes deferred interest which accrues until the green-acre deferments are terminated and assessments begin to be repaid. The debt service schedule on page 9 shows the special assessment portion of the bond issue. Capitalized interest in column 7 will cover the interest payment due on February 1, 2000. Column 8 is the total net requirement after capitalized interest and column 9 shows the total debt service, including the 5% overlevy. The overlevy is required by State statute as a protection to the City and the bondholders in the event 100% of revenues, in this case special assessments, are not collected as anticipated. Columns 10 through 13 summarize the assessments detailed in pages 16 through 19. An excess of assessment income over debt service requirements is shown in column 14. Please note that the surplus of assessment income in maturity years 2001 and 2002 will also be used to make interest payments on the tax increment revenue portion of the bonds. The first collection of tax increment revenues is not expected to be received until 2002 for the August 1, 2002 interest payment and the February 1, 2003 principal and interest payment. Page 5 . . . City of Elk River, Minnesota May 5, 1999 Water and Sewer Portions of the Bond Issue The water fund provides both an up-front cash contribution and a portion of the debt service payments on the bonds. Pages 10 and 11 show that portion of the bonds to be repaid from net revenues of the City's water and sewer funds. Together the water and sewer utilities will cover approximately $750,000 of the total principal and interest payments due over the term of the bonds. Tax Increment Revenue Portion of Bond Issue The TIF 19 Project Budget provides for a $630,000 principal contribution to this project. Page 12 shows the tax increment portion of the bonds. As discussed above, tax increment revenues from TIF 19 are not expected to be received until 2002. As shown in column 7 capitalized interest will make the interest payment due on February 1, 2000. Column 8 shows the assessment income that will be used to make interest payments due on this portion of the bond issue from August 1, 2000 through February 1, 2002. (Please see paragraph below for a discussion of the cash flow of TIF 19.) The City has established redevelopment district TIF 19 in the Highway 10 development area in order to finance some of the public improvements necessary for this development. The cash flow analysis for TIF 19, prepared by Springsted, is shown on pages 14 and 15. The projected annual tax increment revenues from TIF 19, shown on page 14, are based on build-out assumptions provided by the developer. The revenue assumptions also assume a commercial/industrial property class rate of 3.0%. Although the current commercial/industrial property class rate is 3.5% for taxes payable in 1999, there are indications the State legislature may continue to reduce the class rate in future years. The net tax increment revenues available for debt service, after payment of City administration expenses and the State Auditor, is shown in column 8. Page 15 summarizes the expenditures to be made from TIF 19 over the term of the District. Column 9a shows the projected debt service on the tax increment portion of this issue from page 12, column 10. Columns 9b through column 10 on page 15 show the projected debt service on future obligations that will be issued to finance additional improvements within TIF 19. Column 11 shows the surplus of projected tax increment income after the issuance of the debt obligations to be repaid from TIF 19 in columns 9a through column 10. If a positive surplus is realized, as shown in column 11, the City expects to further issue various obligations as shown in columns 12a through 13. This project has been under discussion by the City for a considerable period of time. We appreciate being of service to the City. J;;;;~ej~J4/ SPRINGSTED Incorporated jan Provided to Staff: a) Summary of Arbitrage Rules b) Arbitrage Rebate Addendum to the Contract c) Continuing Disclosure Amendment to Addendum to the Contract Page 6 . . . CITY OF ELK RIVER, MINNESOTA General Obligation Bonds, Series 1999A Composition of Issue Project Costs to be Financed Less: Utility Fund Contribution Capitalized Interest through 2-1-2000 Cost of Issuance (a) Allowance for Discount Bidding (a) Investment Earnings (b) Total Bond Issue 6,080,821 (500,000) 146,000 N/A N/A (1,821) 5,725,000 (a) Included in the project costs to be financed. (b) Investment earnings are required for project costs. Amount shown here is for rounding purposes. Sources of Revenue Special Assessment Income Trott Brook (15 Year Assessments Amortized Over 7 Years) Trunk Assessments (15 Years) Less: Trott Brook Oversizing Less: Trott Brook 7 Year Assessments Less: Green Acre Deferments Net Trunk Assessments Hohlen Lateral Assessments (15 Years) Interior Industrial Park Road Assessments (15 Years) Deferments Principal amount anticipated to be deferred 7 years Principal amount anticipated to be deferred 14 years Total Deferments Total Special Assessments (rounded to nearest $5,000) Water Fund Contribution over 15 Years Sewer Fund Contribution over 15 Years Tax Increment Financing District No. 19 over 13 Years Property Tax Levy Portion (if needed) Total Revenues Prepared by SPRINGSTED Incorporated 5/5/99 1,577,820 4,186,380 (275,000) (1,577,820) (420,420) 1,913,140 207,000 330,000 207,600 212,820 420,420 4,450,000 300,000 200,000 630,000 145,000 5,725,000 Page 7 . c ~ Ga o I tJ) -;;; W III Z 'C Z :; :E iii a ] ~s 14 !iI Ji o '! III C III C) ~ -J W U. o ~ o . su~ ~ ~ ~ S I li~ O:ELi: ~if~ ~~~~~~~a~~~i~~~~ i <wB ~tgct ct me ~ri e~~ g ~~~ ....i.... ~ a:: ~1:Ic;;- o....~~~ a: ~ ~ c _a:: ;; ::J 1 w II J l) i 8 (I) Ji~~ j- "~N l!~ a:: "1-- I:;:: ~!.... a:: ~~O) 8~"" "'-'0 >- 1: -- ~ . e ...J E li ! Z .5 i a:: III ::J VI .!! liE II II () '~~~~~~~~~8!~~~$ 8 ~~~~~~g~~~~~~~~ ~ II) I I '~E~~~~m~~~~~~ ~ gmli~mlig~~~~~~ ~ '~!~~~~~*~~~~~~~ ~ tt~~~~~~~g~~~~~ ~ '~~~~"'-"'-~~~~~~~~~ ~ II)m~...-~~...-NM~~~...-m~ ...- ~~~~~~~g~~~~g~~ ~ $ ~ cD I ~ ~ ~ ~. ~ il ~ ~ m ~ ~ ~ ~ m ~ ~~~g~g~~~~~~~~~ I~~~~"'-O~~~~~~~N~ S ~C6...-~~...-NII)(\')~iOm~~. . ~~~~i~~~~l~~~~~ ~ aj '~~~~~~~~~~~~~~~ ~ ~g,~~~g~~~~~~~~ ~ ~ ~' ~ ...- . . . . I I . . I I . . . . ~ cD . ...- ] J ~ie 8~~~~~~~~~~~~~~~ ~ II !~g,~~~g~~~~i~~~ I ~ ~ I~ 8~~~~~~~~~~~~~~~ ~ ~ ~~~~~tg~~~t~g~1~ ~ ..-NN~..-...-~...-......... 0 N li~ ~I~I~~~~~~~~~I~~ Sa:: d~~~~~~~~~~~~~~~ .E Iff '~~~~~~~~~~~~~~~ ~ ~ iifflii..~~.... ~ I() :E'ff ~Q~~~~~E2~~~i:~g~~ i ~ ~ ~ ~.~.~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ :E .jS ~l~~~~~~~~~~~~~~ 0 > J ~~:g~ ~~ ~ ...-11) ~ - - - ~ ~:B~~ N N - ~5~ ~~~I _ .- 11 a:: II 0 C . E~-q I:;_li-: <~zz II)~~~ ~N!Q~ . cO ~ m ~ .. (\') .. ~ :E'I ~i~ \\I :::E :J ..es > C)~. \\I -g l! . a:: o ~. ~Q a:lcccc.... .!i -5 . "5 I/) .!l :S .... Q I/) I:: .S! e . ~ l .g .c: .~~ 31 ~ ::J Q ~~ ~:... e e &:~ 1::- ClII:: "55 '. u = .r!! ...."CJ e.~ :;: Q) 1/)'""' . ~ ~-8 : s }!. 1ii-fi e ClI .!!! s'" III )( d I ~ Ji I'll "2 ~ e I 3 C. ~ I j o w t; C) z a: 11. rn A' l !. ! 11. Page 8 . . . <( I- a II) w z z :2 ri. w > ii: ~ ...J W LL a >- !:: () <C c>> c>> c>> .... III GI ';:: GI t/) iii " c o a:l c o :;::l C'll .2' :c o jij ... GI C GI Cl '0 c o :;::l ... o c.. .... C GI E III III GI III III <C jij 'u GI c.. t/) 0'l.....0 ~N!:2 ~ ~ 1ii -m ~ OO)~ -0....- ~~"Pi o::2U: rogJ~ :J_..... C o.~ c .... <( :J en 2CO)EM o 0) ..... I-Eo~ I/) () I/)..!: 0) I/) ~ "i2J-gffi~N tl15tl~gJ~ .!!; E ..9! >- eliio '<t c...'!ii(,) ..... o "'CW"'C~U'J- Q)....Q)Q)....,.- tl15tl~gJ~ .!!; E ..9! >- elii~ I'- c...-"" 0) o ~~E~ tlEo~ .!!l, I/) g e:3- c... I/) ~ #.190> LOO~ 01- .....- o >.- ~ > coo O)O)~ ..JE - 0) 0) .... z'5 a- 0) 0::: -o-~ 0)1/)1'- NO)~ ~ (fi 1lI_ ~ C 0.- 1lI (,) tXS1i)C:O (ij~- 0.0) '01:: c- 'C c... -I/)~ m JB ::!. .... 1lI 20::: ..!: - >.~ 0>,.- .... 0) ~ gJ..J >- . . 001'-1'-0 ooCON.....('")'<t('") 00 LO'<tI'-(,") ooCOO'lI'-..........LOO'<tO'l'<tNOI'-I'-CO .....N'<tNCOI'-NO'<t('")NOOOLOI'- ~~~~WMW~~~~~MmoM lOlO,.-,.-,.-,.-N"C""""T"'"C\lT'""T'"" ,.-C") 'ool'-'<t.....oo'<tOI'-O'looooooooO'lLO I'-('")N.....O'looI'-I'-O'lO'lO'lO'lO'lO'lO'l LOI'-O('")LOoo..........('")NO'lI'-LO('")CO co- 0 ~ ('")- O'l- LO- N- co- LO- ('")- 0 ai W '<t- 1'-- ..........ooCO('").....O'lO'looI'-CO'<t('")NN I'-COLOLOLOLO'<tNNNNNNNCO '('")OONCOO'<tooO'l NOI'-('")OCONOO .....('").....ooCO('").....oo ('")-NO~LO-('")-.....-ai LOLOLO'<t'<t'<t'<t('") 00 I'-'<t..... oo'<t 0 '<t..... co NOO '<t.....N 1'-('") N.....O'looI'-LOO'lNCOO'l ('") 1'-0 LOI'-O ('")LOoo.....O o...............NN('") co- 0- 1'-- ('")- O'l- LO- N- ('")- ('")- ('")- ('")- ('")- ('")- ('")- ('")- ..........ooCO('").....O'l'<t('")N.....OO'lool'- I'-COLOLOLOLO'<tNNNNN............... '.....O'<t('")NNO'l'<tLOLOO('")LON('") .....'<tLOO'loo('")CO('")OLOI'-O'lNN('") ('")NI'-COooCO.....I'-OOO'lI'-LOooO'l ~ LO- N- co- ~ m 00- ~ .....- N- ('")- ~ 1'-- ('")- ('")- COLOI'-'<tNO'lCOooI'-LO'<t('")N.....O'l COLOLOLOLO'<t'<tNNNNNNNLO 'OOOOOOLOLOO('")('")LOOOO NOOOCO'<t'<tI'-I'-OLOLOCOO'l'<tLO oooo'<tCOOOOO oo..........O('")LO co co co O'l- 00- LO- 0 0 ~ LO-.....- 00- 0 N '<t- W M LO- NN'<tNOI'-'<tI'-LO'<t('")N.....OCO COLOLOLOLO'<t'<tNNNNNNNLO 0' o o O'l- o ..... NOOOOOOLOLOO('")('")LOOOO .....NOooCO'<t'<tI'-I'-OLOLOCOO'l'<t\{) 00 00 00 '<tCO 0000 oo..........O('")LO co co co ~mai~oo~~~aioN~WM~ ONN'<tNOI'-'<tI'-LO'<t('")N.....OCO .....COLOLOLOLO'<t'<tNNNNNNNLO -~ I/)LO O)~ .... 2 ..!: NOOOOOOLOLOO('")('")LOOOO .....NOooCO'<t'<tI'-I'-OLOLOCOO'l'<tLO 00 00 oo'<tCO 0000 00.......... 0 ('")LOCO co co ~~ai~o~O~~M~~m~M~ OooCOLO'<tN.....O'looI'-COLO'<t'<t('")N ,.- "If"'"" ,.- T'"" ,.- ,.- ,.- #.#.?f!.'#.#.?f!.'#.'#.'#.'#'#.?f!.'#?f!.'#?f!. oOOOOOOOLOLOOLOOOOLO OCOl'-ooO'lO.....NN('")'<t'<tLOCOI'-I'- OMMMM~~~~~~~~~~~ roc;? o.~ '0 .!;; CL 'ggggggggggggggg 000000000000000 LO- 0 0 0 LO- ~ 0 0 LO- LO- LO- LO- LO- 0 0 '<tCOO'lOOI'-COLOO'lOOI'-I'-I'-I'-I'-'<t v(")('f')('f')('l')("')('l')"r"""T'"",.-,.-"---T'""l() >.~ t~ :J lii ::2 O.....N('")'<tLOCO 1'-00 O'lo.....N('") '<tLO 0000000000,,-,,-"-T'"""-T'"" .............................................................................................................. ~~~~~~~~~~~~~~~~ ooO'lO.....N('")'<tLOCOl'-ooO'lO.....N('") 0'l0'l0000000000.................... 0'l0'l00000000000000 ..........NNNNNNNNNNNNNN LO ('") ('") ~ ('") '<t co co 00- I'- '<t co- ''<t o LO LO- ~ '<t o LO LO- ~ o N '<t N- I'- ('") o '<t I'- o O'l co LO- I'- Ln N LO ..... co- o '<t LO O'l- LO 00 ~ o o o O'l- o ..... N LO ('") ~ co O'l ~ N LO ('") 1'-- Ln_ NON# LOLO 0 00 ('")I'-.....CO - - -LO I'- co '<t . .....COoo'<t LO_ LO_ 1ii_ ~ 5 (j) _0) E 8 0) 1lI _ .!Il .2l 0::: 1lI 0 C . ~I/)::;~ c.;!O)-: <(c...zz o o o o LO '<t ~ ('l")Q)?f!. OOI'-LO . . I'- 01'-('") 00 . co '<t '<t- ('") I/) ~ I- ~~ so::: ~1ii1U 1lI ::2 :J 0) 0) C >- :i~ -0.... . CO)C) S~~ "0 0) >< o~ .!g., 0) es Cl..c: 1:: 0 .!!! ~ ~"O ;:,J1 (/) c: ~ E :;; :>0, e ~ Cl...... o (/) .... ~ (/) 0) ~:s ~ 0) c::E E g: <tl~ 15 ::> ;:, (/) (/) <tl .S: c:- "0 0 ~'t .2 0 (.) Cl.. .s~ (/) E c: (/) 0) (/) O)QlN ..Q(/)o (/) (/) 0 <tl <tl C\I -;~..: ~ c: C .!!,! 0 <tl "OJ12 c:c:..Q .8Etf 0) ~ i5J :E Cl.. ;:, '4-.....e o (/) ..c: c:e- o 0) 0 't1::0 o 0 Cl.. "0 C\I 1:: ai ~.. E Qj ~ (/) .S- lJ) ~ g ;:, (/) '1:: <:( g:~~ Q)o~ :E..Q(/) ......."lJ o Ql c: ::. 0 C:O..Q Ql (.) 0) [.E:E <tl Ql .... Cl.. E 0 ~ 0 c: _ (.) .!2 .~~ 15 (.) c: Cl.. c: 0) .... '1:: E c: ~~E ~ 3l ~ g: .s: .!!i .g 0) ..c: (.) (/) .1/) :S .... o I/) c: o ~ .l!! Qj 1:: <tl (.) ;;:: .~ '(ij ~ 3l ~ ;:, 0 ~~ ~~ E E ~~ lJ)..Q c:.... <tl c: ..c: ;:, (.) 0 iIl- .~ .l!!"lJ E~ ~:jg Ql ~ ~ Ql <tl"O ~ S ecu 1ii-t ~ III .l!! Ql .s~ Page 9 III X ci ~ f 0) > 'C -" ]i ltl "'0 C 0) :9 l!! Ql III 9 C, m ~ !!2 LO "'0 <1l 1U o c. o o c o w l- t/) e> z a:: c... t/) >- .c "'0 <1l l;; C. <1l a: . . . <( t- o Cf) w z ~ :2 ~ w > ~ ~ ...J W u.. o ~ U <( (1) (1) (1) ..... III Ql ';: Ql (/) III "C C o 1Il c o ~ 1Il .!:!' :c o iU ... Ql C Ql C) - o c o ~ ... o a.. 0'>.....0 0'>--0 __N__ ..... ..... -- -- I'- N ... $ ~ Ql 1i) +-' Q) 1Il ID OQ)+-' "C.....E Q)::l+-, ~ro~ O:2U: ~rom ~-o~ .....1- - o >>+-' - >COO Q)Ql~ ....!E +-'Q) Q) ..... z'5 t:T Q) 0::: "C+-'- Q)1Il1'- N ~~ =Q) 1Il+-' ;t:::C a.- 1Il () _" +-' - UU(/)<O - Ql ~ 1Il ..... a.Q) ,- +-' U C c- 'C a. +-' - (/)LO ~~ Q) +-' C +-' (/) - (/)Ql",," Q) +-' - ..... CO 20::: C roM' a.- '0 C 'C a. >>- ~N .....- ::l +-' CO :2 - >>- 0>..... ..... Q)- co....! Q) >- '.....N"""LO..........OOOLONI'-O'>OOO<O I'-MO'>O'>MO'>M",,"LOO'>M<OOOOOO'> OOO'lI'-.....OOO'>.....NM<OLOM.....O'>O'> cO M- 00- 00- N- ~ ~ 6 0'>- M- N ~ 6 00- N- .....NNNMMMMNMMMMNM 'MMMMOOOOOOOOOOOOOOLOOOLO 1'-000NLO<O<O",,"OLOOOOOI'-LOON 0'>1'-",,"00 N",,"<O 00 0'> 0 0'>001'-<0""" r-: N r-: <0- ~ 6 oi cO r-: N- 6 oi 00- r-: ~ .....NNNMMNNNMMNNNM O' o o 0'> OOMMMMOOOOOOOOOOOOOOLOOOLO <0 I'-O'l NLO <0 <0",,"0 LO 00 OOI'-LO ON LO 0'> 1'-""" 00 N",,"<OOO 0'> 0 0'> 001'-<0""" r-:r-:Nr-:~~6oicOr-:N6oicOr-:~ .....NNNMMNNNMMNNNM OOMMMMOOOOOOOOOOOOOOLOOOLO <OI'-O'lNLO<O<O",,"OLOOOOOI'-LOON LO 0'>1'-",,"00 N",,"<O 00 0'> 0 0'> 001'-<0 """ r-:NNN~~6oicOr-:r-:~~MN~ '" T""" T""" '" '" or- '#.'#.'#.'#.'#.'#.'#.';f!.'#.'#.'#.'#.'#.?ft.'#.'#. OOOOOOOOLOLOOLOOOOLO 0<01'-000'> O.....NNM """""" LO <0 1'-1'- OMMMM-q:-q:-q:-q:-q:-q:-q:-q:-q:-q:-q: '000000000000000 000000000000000 000000000000000 ~6~LO- 6 666 6~ ~LO-LO-LO- 6 ................NNNNNNNNNNM O.....NM"""LO <01'-00 0'> O.....NM ",,"LO 0000000000............................... ............................................................................................................................. 'f""""",,,"'''''''T''""T''""T''""''''''T''""T''""T''"",,\"'f''''"" .............................................................................................................................. NNNNNNNNNNNNNNNN 00 O'>O.....NM"""LO<OI'-OO O'>O.....NM 0'>0'>0000000000.................... 0'>0'>00000000000000 ...........NNNNNNNNNNNNNN 00 o ..... LO- """ """ M ..... 0'> M- N """ o o o oi ..... 00 """ ..... M """ ...... 00 """ ..... M ...... o o o 0- o M T"""OT"""'#. OOOOON ",,"LO 0'> 0 - - -<0 ..... """ LO ' M M",," ..... ..... 1i) Q)+-' ..... C Q)::l1i)Q) c8Q)+-' = ,f(! ID & CO 0 c . ::l(/)-() ~.2Q)-: <(a.zz OLO~ 0000'> . . """ LOO'>",," LO . 0'> """ N (/) ro -0 I- >>Q) +-' +-' .- CO :So::: (/)roro ro:2 ::l Q) Q) C >-O)c co<( "C..... . CQ)O) o > > 1Il<(<( ~ .g Q) .c:: U (/) (/) S ..... o lI) c:: o :;:; ~ 2 m 1: CO U 4:: 'c: .21 >.. lI) .... Q) ctJ lI) :::- ::J 0 ctJ lI) um >.,>., ctJ ctJ E: E: ~~ b)..Q c::..... ctJ c:: .c:: ::J u 0 (,l .~ 2-0 ~~ i5Jg Q) ~ ~ Q) ctJ"O lI) c:: Q) ::J ~~ 1;)0 ~ ctJ Q) Q) ~t: Page 10 11I X ci ~ ~ -c ~ ~ ~ "0 C 0) ..... .c ~ 0) 11I 3 Cl O'l O'l i:O i:O "0 .l!l ~ a a. ..... a () E o W f- en C) z 0::: (l. en >- .c "0 ~ III a. 0) a: . . . <( I- o tJ) w z z :!: ci w > ii: ::s::: ..J w U. o ~ (.) <t Ol Ol Ol .... en Ql ';: Ql en iii "C s::: o aJ s::: o :.;::; (\J .2> :is o Cii ... Ql s::: Ql (!) '0 s::: o :.;::; ... o a. Ol...-O Ol--O __N__ ...- ...- -- -- I'- N ... Ql ~ en Ul 2 Ql ro .... D Ql "U~E Ql:J..... roro~ D~U: ~ro(j) ~o--- ...-1-- '+- o >-- ~ >s:::o::> QlQl~ ...JE .....Ql Ql .... z'::; 0- Ql 0:: "U.....~ Ql(/)I'- N~- =Ql ro..... ~c 0.- ro C) _" .....~ UV(/)CD - Ql- ro .... o.Ql .- ..... o c c- 'C 0... .....~ (/)LO 0) - .... Ql ..... C - (/)~ (/)Ql"<t 0) _ ~ .... ro 20:: c roM 0.- '0 C 'C 0... >-~ :!:N ....- :J ..... ro ~ '+- >-~ 0>...- "- OJ- ro...J Ql >- 'I.()CDN('I)('I)('I)O::>CDI'-NOlO::>O)LOO::> ('I)"<tO OO)NI'-"'-"<tCDCDCDLO 0::>0) ('I)...-NO::>('I)NLO 0) NLO o::>......"<t 0) 0) '- ('1)- N- ~ ...-- 6 0)- 0)- ro N ~ ...........................-NNNNN..................NN 1 ('I)('I)O::>O::>O::>O::>('I)('I)LO('I)('I)LOOOO LOI'-O::> 0............ 01'-('1) 0::> NLO O::>o)LO CD"<tNo)LO......LOO::>NLOo)NLOO::>o) ('1)- ('1)- ro r-: 1'-- N ......- 0- 0- 0)- 0::>- 0::>- 1'-- ......- 0- ..............................NNNN........................NN 0' o o <.0 0::>('1)('1)0::>0::>0::>0::>('1) ('I)LO('I)('I)LOOOO "<tLOI'-O::>O............OI'-('I)0::> NLOO::>o)LO OCD"<tNO)LO......LO 0::> NLO 0) NLO 0::>0) ~MMror-:r-:N~66mroror-:~6 ..............................NNNN........................NN 0::>('1)('1)0::>0::>0::>0::>('1) ('I) LO ('I) ('I)LO 000 "<tLOI'-O::> 0............01'-('1) 0::> NLOO::> o)LO OCD"<t NO)LO......LO 0::> NLOo)NLO 0::> 0) ~ 0::>- 0::>- 0::>- 1'-- r-: 1'-- CD- LO- ~ "<t- M ('1)- N ~ 'cf!.~~'#.#.'#.?f!.cf!.'#.'#.'#.'#.'#.'#.'#.'#. OOOOOOOOLOLOOLOOOOLO o CDI'-O::>o) O......C\lN ('I) "<t"<tLO CD 1'-1'- cicvjcvjcvjcvj..t..t..t..t..t..t..t..t..t..t..t '000000000000000 000000000000000 000000000000000 ~ ~ 6 6 6 LO- LO- LO- LO- LO- LO- ~ LO- 6 6 T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""NN O......N('I)"<tLO CD 1'-0::> 0) O......N ('I) "<tLO 0000000000.................................... ~~~~~~~~~~~~~~~.~ T"""T"""T"""T"""T""" T"""T""" T"""T"""T"""T"""T"""T"""T"""T"""T""" ------------------.........-...------""'-........----...--........ NNNNNNNNNNNNNNNN 0::> 0) 0...... N ('I) "<tLO CDI'-O::> O)O......N('I) 0)0)0000000000...............-...... 0)0)00000000000000 ............NNNNNNNNNNNNNN N 0::> 0::> CD 0) N LO "<t I'- N- o::> N o o o CD ('I) 0) I'- r-: 0::> N ('I) 0) I'- I'- 0::> o o o o o N (/) ro ..... o I-- ('I)O('l)~ O)OO)LO 1'-01'-0 - -- CD I'- ('I) 0 , 0::> O)"<t ..... ~c ....:J..... 20(/)0) co~ro = ,!Q Ql 0:: roDe, :J(/)-C) 2.20)--: <(o...zz I'-CD~ CD 0::> ('I) . . LO ......O)"<t I'- . 0) "<t ...... >-0) ..... ..... .- ro ::;0:: (/)roro ro~:J 0) 0) C >-OlC ro<( "U.... , CO)Ol o > > cn<(<( <Ii ""5 "t) Q) ..c: o (/) (/) ;S ..... o (/) c:: o :<::; ~ ~ ro ...... c:: Cll o Ii:: 't: '~~ Q) Cll (/) :::. =:3 0 Cll..!!! o Cll :::...:::... 1U 1U E: E: ~32 0).0 c::...... Cll c:: "5 5 , _ 0 (/) ,~ Q)"t) Iii (/) ,~ ); (;)~ Q) ~ ~ Q) 1U"t) (/) c:: 0) =:3 ~~ ...... ...... (/) U ~ Cll Q) Q) :S~ Page 11 Ul X c:i ~ ..c -c ~ 'C ..><: ~ -c c Ql li -e! Ql Ul ;! i::il Cl) Cl) lO lO -c .l!! ~ o a. l5 {} 1: o UJ I- en Cl z a::: c.. en >. ..a -c ~ co a. Ql a: . . . <C .... o rn w z z :: ri w > " ~ -I W LI- o ~ <3 <( Ol Ol Ol ..... 1/1 Ql ';:: Ql en iii "C r::: o co r::: o :;::::; III ,El 1i o iij ... Ql r::: Ql (!) '0 r::: o :;::::; ... o 0.. - c: Ql E Ql ... o -= >< III I- Olr-O Ol--O __N__ r- r- -- -- I'- N iii Ql Q) - ..... ('II Q) oQ)e "C.....- Q)::l_ ~ro~ 02i:i: ~roo ~OS r-I- - o >-- - >r:::Ol Q)Q)- -IE -Q) Q) ..... Z '5 c- O) (Y "Q)+-Q)- lllJ5:iiEe Q) ('II E 0 -1:= 1/1 U ('II 1/1 r::: ~l}l- ~ "C-- Q)I/II'- N~- =Q) ('11- :t::=C 0.- ('II () -,,-- UUI/l<o - Q)- ('II ..... a.Q) .- - u r::: c- 'c a... wi{) Q) - ..... Q) - c -1/1- (/)Q)'>t Q) -- ..... ('II ~(Y c roc;) 0.- '0 'E a... >-- :t::N .....- ::l - ('II 2 '0 ~~ .....Q)- ('11-1 Q) >- 'I'-r-MMr-I'-OlIOIOOlO'>tM <Ot-MIOOOOlMIO'>tIO<OIOOl 1'-r-I000MM<OMOOlMOlOl 6 Ol- ~ 10- cr> 1'-- 6 00- cO 00- <0- o::i 10- 1'-<0<0<0<0<01'-<0<0<0<0<0<0 '000000000000100010000 Ol I'-r-r-I'-OO 1'-0 01'-01'-10 MOOMt-O.....N.....Ol<ON<OOO 1'-- 10- ..t N <0- ..t ~ 10- N 10- M- Lei N <0<0<0<0<0<0<0<0<0<0<0<0<0 , 00 00 ' 0l0l MM ~ 1'-- NN 0' o o o::i ..... NOOOOOOOOOOOOOOOOIOOOIOOOO 00 0l0l Ol 1'-""'''''' 1'-001'-0 0 1'-01'-10 OlMMMOOMI'-O.....N.....Ol<ON<OOO Lei~~~Lei..tNcO..t~LeiNLeiMLON .....NN<O <0 <0 <0 <0 <0<0<0 <0<0 <0<0<0 NOOOOOOOOOOOOOOOOIOOOIOOOO 00 0l0l 0l1'-..........1'-001'-001'-0 1'-10 OlMMMOOMt-O.....Nr-Ol<ON<OOO LO~~~LO..tN~cr>~LON6o::iLON .....NNNNNNN......................... ';f2.~'#.'#.#.'#.';ft.'#.-;f!.'#.'#.'?f!.?ft'#.'#.'#. 00000000101001000010 o <01'-00 Ol O.....NNM'>t'>t1O <OI'-l'- ciMMMM~~~~~~~~~~~ '0000000000000 0000000000000 0000000000000 666 61O-LO 6 6 6 Lei 10- 6 6 '>t'>t'>t'>t'>t'>tIOIOIOIOIO<O<O O.....NM'>tIO<OI'-OOOlO.....NM'>t1O 0000000000.............................. -...-....-...-...-...........-....-....-....-...-...-...-...........-...-... 'r""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T""""'\' -....-...-...-...-...-...-...-...-....-....-...-...-...-....-....-... NNNNNNNNNNNNNNNN OOOlO.....N M'>t1O <01'-00 OlO.....NM 0l0l0000000000.....r-.......... 0l0l00000000000000 ..........NNNNNNNNNNNNNN I'- o '>t 10 00 00 10 '>t N M '>t 00 10 Ol I'- '>t 10 o o o 00 ..... N N o '>t ..... Ol N N o '>t 00 N o o o o- M <0 NON~ NIOI'-N 0'>t'>t0 - - -<0 '>t Ol M . 00 Ol'>t N N - ~c .....~- ~o(/)Q) cU~ro = .~ 0) (Y ('IIOe . ::l(/)-() 2.20>--: <(a...zz ON~ 1Or-'>t . . 10 I'-O'>t 1'-..... . M '>t <0- (/) ro - o ~ >-Q) ~rn ::;(Y (/)ro(ij ro 2 ::l Q) 0) c >-O>c ('11<( "C..... . cO)o> o > > CO<(<( a:i :5 "0 0) .c:: u C/) C/) ;S ..... o C/) c:: o :;:; ~ Q) ~ C 10 U l+:: 'c .~~ Q) 10 C/) > :J 0 ~~ >..>.. 10 10 E: E: ~:Q 0l.Q c::....... 10 c:: .c:::J u 0 . _ u C/) .!!2 Q)"O ~ -~ t;~ Q) ~ ~ Q) 10"0 C/) c:: Q) :J ~~ 1i5t3 ~ 10 Q) Q) ~~ Page 12 en x ci ..... >- 3= .c -c ~ 'C -" Qi Iii "0 C 0) 1i Ui ffi en :J .- i::i> (j) ~ LO 1.0 "0 ~ l5 0- ..... o () .f: o W I- en (!) z 0::: 0... en >- .c "0 0) ..... ro 0- 0) ..... 0... . . . <( I- o tJ) w z z :: ~ w > ii: ~ ...J W LI- o >- I- o <( Cl Cl Cl ~ en CIJ ';:: CIJ en iii "C C o lD c o :;:; I'll .2" :c o Iii ... CIJ C CIJ (!) - o c o :;:; ... o a. >- > CIJ ...J >< I'll I- ~ ... CIJ c.. o ... a. 0'>..-0 0'>-0 -..N........ ..- ..- - - r-- N 1ii CIJ CIJ - .... I'll Q) OCIJC -0....- Q):J_ roro~ O~U: ~rom :g(5~ ..-1- - o >0- ~ >COO Q)Q)~ ...JE -Q) CIJ .... Z ':; 0- Q) 0::: -o-~ ClJoor-- N~- =Q) ro- :!:::::C c.. - ro o _" - ~ ""00(0 -Q)~ ro .... c..Q) -- - U C c- 'C 0... -~ 00L() CIJ~ .... Q) - C - 00 ~ ooCIJ-.::t CIJ_~ .... ro 20::: c Ciic;) c..~ '0 c .... 0... >o~ :!:N ....~ :J - ro ~ - >o~ 0>..- ....Q)~ ro...J Q) r 'M-.::tO'>O..-..-OO'>M(O-.::tr--L()NOO (Or--NMNOr--NOON(oO'>N-.::tO'> r--L()(ONOO-.::tO'>L()0 (O..-(ONr---.::t ..-- ..: (0- (0- L()- L() - '-.::tOO..- NOOO-.::tO(ONOO-.::tO'>L()O(O..-r-- ..-- ..-- L()- L() - L()- -.::t- -.::t- c-.::tOO..- (ONOOO-.::tO(ONOO-.::tO'>L()O(O..-r-- c<i..:..:~~~'<i'<ic<ic<iNNN..:..:~ T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T'""T""" OMMOOOOOOOOOOOOMOOOOMMMM NON ML() (O(OL()M..-r--MO'>-.::t 00..- (ON 0 OO-.::tO(O N 00-.::t0'>L() O(O..-r-- c O..-NNM-.::t-.::tL() (Or--r-- OMMMM.,r.,r.,r.,r.,r.,r.,r.,r.,r.,r.,r '000000000000000 000000000000000 000000000000000 ~L()- 6 6 6 6 6 6 6 6 6 6 6 6 L()- T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T""" O..-NM-.::tL()(Or--OOO'>O..-NM-.::tL() 0000000000..-..-"-"-"-"- -..................-...-..-..........-..........-..-...-...-.......................... T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T"""T'"" NNNNNNNNNNNNNNNN OOO'>O..-NM-.::tL()(Or--OOO'>O..-NM 0'>0'>0000000000"-"-"-"- 0'>0'>00000000000000 ..-..-NNNNNNNNNNNNNN M L() 0'> 0- ..- N 00 o 0'> o o N o o o ' L() o o o L() -.::t ..- 00 Cii (5 I- OOL()M~ Nr--OO'> L()..-r--oo - - -L() 0'> N..- . L() (O-.::t 1ii Q)- .... C Q) g 1ii Q) cuQ)- = .~ Q) &. I'llOc . :Joo-O 2.2aJ-: <(0...22 00r--~ L()Nr-- . 'N -.::to'>-.::t -.::t . M -.::t ..- >oQ) -- .- ro :::;0::: enroCii ro~:J Q) Q) C rOlc ro<( -0.... . CQ)Ol S~~ <ri '"5 "0 Q) .c: u lI) lI) ;S ..... o lI) I:: .2 ~ .l!:l (;j ...... I:: ro u Ii:: 'c .Ql >. lI) ... Q) ltl lI) ~ ::J 0 ltl lI) u(;j ::..,::.., ltl ltl 1: 1: lI)"O Q) '- 0l.Q 1::...... ltl I:: .c: ::J u 0 " u ~:6 16 lI) 1:"L. '- Q) u;~ Q) ~ ~ Q) ltl"O lI) I:: Q) ::J ~~ ...... ...... lI) U ~ ltl Q) Q) :S~ Page 13 (/) x ci ..... >. ~ .... Q) .~ .><: ]i III -c C Q) .... :9 ~ Q) (/) ;l 01 0) ~ to LD -c 2 !'! o e- o o ..f o W l- (/) (9 z ii: 0.. (/) >. .0 -c Q) lii c. Q) 0:: . . Q) .... o z .... (J .;: .... 1/1 i5 -- .... e Gl E Q. ns 0 -a; o > In Gl CI)'C C~ c..... .- 0) :::lEe - 'u ~ :;; > e jiiL: .... ~; W E 1/1 .... Gl Gl o l:i :l >>.E; ~ >< ~ .O~a: __CIl III CIl :l ~:::lZe__ 02l.L~~ 1-<(-CIl 1-0::: c Ui.8~~ 1Il .- 0 10 LO CIl-g.g"'........ -l<(CIlO o 1Il Ui .5 5l ~ ~.g ~~~ -l<(xN W lii 0) '0 ~~~ ~EI- I- 0 () -'CO) ~.0.5 __ cC"N CCllC........ <(Q..w c o ..... x U 1Il-- IIl..CIl..... I-~>-........ o () OOOVVM~~~~~~~~~~~~~~~~~~~~ 0 ~~o~~~~~~~~~~~~~~~~~~~~ ~ ~~1O~~~~~~~~~~~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~o 1O~~oooooooooooooooooooo N ~1O~oooooooooooooooooooooooooooooooooooooooo ~ ~ .... ooo~~ooooooooooooooooooooo.... ....~~~~~~~~~~~~~~~~~~~~~~ N O)~~oooooooooooooooooooo ~ ~~NNNNNNNNNNNNNNNNNNNN~ ~ ooo~~~oooooooooooooooooooooooooooooooooooooooo~ O)ooo~~~~~~~~~~~~~~~~~~~~ ~ N~oo~~~~~~~~~~~~~~~~~~~~ ~- ~~M~~mmmmmmmm~mmmm~~~~~"" ~~~~~~~~~~~~.~~~~~~~~~~ ~ ~ - c CIl E-- CIl~ ............. o .5 000....~0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0)0) ~ ~~~~~~~~~~~~~~~~~~~~~~~ 0) 1O~OO)O)O)O)O)O)O)O)O)O)O)O)O)O)O)O)O)O)O)O) ~ ~ONMMriMriMMriririririMMMMMMMM~ ~o)o)NNNNNNNNNNNNNNNNNNNN N ~1O~oooooooooooooooooooooooooooooooooooooooo.... 00 .... o)O....N~~1O~~ooo)O....N~~1O~~ooo)O....N~~1O O)oooooooooo..........................................NNNNNN ~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~ QQQQQQQQQQQQQQQQQQQQQQQQQQQ NNNNNNNNNNNNNNNNNNNNNNNNNNN 000000000000000000000000000 ooo)O....N~~1O~~ooo)O....N~~1O~~ooo)O....N~~ O)O)oooooooooo........................................NNNNN 0)0)0000000000000000000000000 ........NNNNNNNNNNNNNNNNNNNNNNNNN 1Il X m f2 () ~ 0 0 N 'C e ell 0 C- o c 0 CIl N E f! CIl ell ..... Gl 0 .5 >- CIl e > 0 'C +:l " (J 1Il .! c '0 0 (J ~ I- CIl .2 '0' ..... -- 'C Q. 1Il Gl CIl > 1Il - -..... :::l 'iij - CIl III (J Q. 1ii Gl 0 I- Q) Z Gl 6) :2 ..c o >- 'j ___..-:,...0 - >-" c~CIl .... -- e CIl () ..... Gl 0) E ......S E ~ CIlClltT l:3 Q. CIl e c 1Il ..... (J !e- ..- III 1Il .5 " CIl x ........ III . rollllll.....CIl ~ $ ,,-CIle:l ~ - 1Il 0 C ell ...: g>.~ c U ~ e 0 a. 1Il.-..... CIl:::l CIl 0 ..... CIl" CIl a."..... +:l 0 >-5iE~CIlQ) ell 0 J!!"ECIl"C ;;::: .5 .c 0>.....- ,5 " III .0 () :;:: oS III 1/1 CIl >- 5i III .- :::l - 1Ila."~"c Gl 1Il a. CIllll:::lC E 0) 1Il lii "0 '2 <( III :l C 'C CIl :::l CIl .- CIl - 1/1 a. x C '0' E - .!!! 1/1 W IIlc.....'C.!!!o <C I-<(Q..<(WI- >. j!j .c ...-.....-.................-................-. " ....N~~1O~ 0 l!! "-" '-" "'-" '-" '-" '-" Z III a. l!! Q.. Page 14 . . en ..... ci z ... ... .;:: ... III i5 ... C Gl E Q. S~ o > 11I Gl Gl al 2~ :i g> ..: 'u Gl ; > c ii:~ ~ C III weE Gl .a ~~:g ~ 8- .- ~ >< O~W ~ .. fl ~ffiLO E (ij:::' :JID U a;~~_ Ee.li.:! ~~e.~ 8-o~~- _ c: I co ('l') ~jiO'@):S t- c.. fh Gl c~~ E :J .0 -~ ~ ~ <( Q) 0:: o 8wt5*ro ('l') I co C\I ~ iO'@):S .c.. u; Ul -aw-gU)~ :s~~o:s C/) 0- 8_ E ffi~ s 82.3@:::' (")E fh N o ~- g-o~C:*'- ~a:::,-cal/)O g ,,l!!..9@~ N ~-= fhu o o ' 0.0 LO ' t-C) t- fh "53 ;g; E ~ g_ ~5~~ 5. co .~ - ~ rJl Qi . ~ 'liiq~lil lijC)81~ ~.8~ ~ "8 .~ _ c'C:: "0.(\1 eQ)&:- <(c..w C o .... ~ t5Q)- m ~ I-=>-~ o U 000000000000 O""""OCOv"'=t.......NM.q-LOw......como N-M v I.() or- m ....... ~ "f""" co 1.0 NO> (0 .q- O)or-(O('I')<r-lJ)MCOM.......N............(O'l"""" ~ N N M Lt)R.L{)R ~ cr:i N r-: ri cO -.:i mR Lri ..............com__CO<DID..............cocommo N.......N.......('l')C)<D.....NOCO<D...,.C\I...... ~ ~ N Nriv.l.()-cti<<ir-:ro- m- ~ o 00000 000 oOOv<OCO<oOMU')...................................<r- a N 0......0 CD co........................................""''''''''''''''' v OlNLO..............CO('l')"'It.....'V""""v'V""""-.::t "f"""- o. o. o. __- o. I.t'i Lri 1.0- Lri t.()- t.ri I.t'i ..n l.t)- tri .......O'l"""'l"""N.......r---.oooaoooo 0 C'\I L()IJ')I.OLO co <0 co coco co co OJ coCO 'II"""" ci ~ 0000 LOOLf>.......v<OMLO.......O LON.q-wm.......co........... __COMU')CX>C\!vm..... ~ri'V-r--:r-:r:til.t'io-a:i NM...,....,."l;t..-OlN ~""N 0000000000000 N <0 o o:i (") o. ~ 0000 CDNO.......LOMOCOLOl:")OCOU)('l')OO LO..qLOLO<o.......cocomO'll""""__C\lM"Ct mm..qmvm...,.cnvOlt>OLOOLO C\I- L{of ~ cD N"": ('1')- co. ott:tA o-I.rf T"""~ W- N"': WMMNNT"""T"""CCCmmCOCCl...... T"""T"""T"""T"""T"""T"""T"""T"""T"""T""" ococcco co '" '" ,..: LO <0. ~ occomWO>McNWC m......ool.Ococ MI.OT"""T"""C'VT""" o-Nm~ctiT"""AV~~ T"""T"""ONMM...... NMvvVM 000000000000000 ~ <Xl to en ~ N oooov......v......mT"""mMWmCOvI.OCDI.OT"""T"""T"""T"""T"""T"""T"""T""" M T"""MCNOMWC:OWONNCOT"""T"""................................................ CD l.OT"""mWv......omT"""NO......Nmmvvvvvv~~ M ~N~N~oom~ow~ctiNN~~~~~~~~,..: ..................oooomoooooI.OI.OOOOOOOOO m T"""M~C:OWWWI.OWWWCDW""""""COCOCOCOCOCOCOCO m .,f' ~ oooo....................................~~~~~~~............OOOOOOOO m wWWWC:OWWWWCDCDCDWCDW m WWCDWWWWWWwwwwww m cti<<icti<<icti<<icti<<i<<i<<i<<i<<i<<i<<i<<i m NNNNNNNNNNNNNNN N ..,. oooommmmmmmmmmmmmmmoooOOOOO N COCOCOCOCOCClCClcocococococococo M coCOCOCOCOCOCOCOCClCOCOCOCOCOCO M MMMMMMMMMMMMMMri <<i NNNNNNNNNNNNNNN 1.0 (") OOOOCOOOI.OI.OCOCOCOI.OCOCOCOCOOOOOOOOOOO m mT"""T"""MNCOOmO~NMM N ~I.OI.O~T""""""NI.O"""~I.ONW 1.0 mM~~N~N~~riON<cvMOOOOOOOOOO ...... w......MI.OCOmMl.OvI.OWl.Om 0 ......T"""I.OCOMMWMOmMmm ~ om~~m"':o<<iw<<iw<<i~ ~ ......CDWWWW......wwwwww co <Xl COmOT"""NMVl.Ow......comOT"""NMVl.Ow......comOT"""NMvl.O mmooooOOOOOOT"""T"""T"""T"""T"""T"""T"""T"""T"""T"""NNNNNN ---------------------------- 0000000000000000000000000000 NNNNNNNNNNNNNNNNNNNNNNNNNNNN 0000000000000000000000000000 ......comOT"""N('l')Vl.Ow......comOT"""NMvl.Ow......comO~NMv mmmooooOOOOOOT"""T"""T"""T"""T"""T"""T"""T"""T"""T"""NNNNN mmmooooooOOOOOOOOOOOOOOOOOOO T"""~T"""NNNNNNNNNNNNNNNNNNNNNNNNN Ul '0 Q) Q) o e a. '0 C o .0 E .g '0 '(ij a. 't) l!? Q) :5 a. l3 15 ~ '" -2~ ~~ .0 Q) ~ ~ oC/) U E C .... o 0 15U5 U5-g ~'" :..:J1i5 , Q) ol:: oc/) o. e g~ ~~ en Ul en Q) en .... :;~ CD o~ c. ~ Qico Q) cnoui ~ e ui~55 a. U) -g-gE ~ ~ OOQ) co ce- IDe> Q) ~:J c: 07 [ o~ .g ~ ~;g;E~Q) ,l!!.o Q)gN~~ 0~:'2--, ~ N T""" 0 .0 c ;>.~ M '-U)-c~Q)3:-c-:=' E'~ ~ :c: ~.g ~ g ;... -Q)o::~eQ) ...0 ciC/) ,.,'O'~'E-g:!1l~ . ui cC: 0 S CO :J - (!)-c::J.!2t::-c$C"I 858c:.8ffi55~ro o_CO-c.gea:: E-g~ ~C:5g.~..g~.!2~ ......_~';oc:&eg~ 1.0 Q)_~O_ I a.0T""" ~>c:c-g~~~::: -g [ ~ ~ CO ~ 02 ~ ~. cD ~~ii-g~:g~~~ ~ .EE.8iO'o...o(]jea oq.!!.!QiQ.'91-a..c .9~~~~g~~s~ .mggg UJri~~~~ en llio-o-.2...... m cp ~ ::J ~~~g ~~A~~2 ~ ~fhfhfhC/)fhfhc..<(U ro:OOS~ca:OM:;;rLO mmmT"""~NNT"""T"""T""" -----:=.~--- Page 15 Ul x ai l2 U ~ o ..J u. :I: C/) <( U W :I: ~ o ~ o w o o <( z w w 01...: ~o 00 ZN "C C/) C <( '" :I: 0 iD8 to-N O'te! "'", "'Q) ~,., ~c M 0 ....+:J 0'" zg <( 0 ~... ....... 00 ",... cOal ;;l; > ... .- ~Gl ~e ..... CIl C/).o z= ~'!i 5~ U E o::l!! 0'" u. .E ~~ C/) '" W C 0::0 ~~ z; -c 0'- Will ::l CIl 0:: E U :l U ::: <(<( .s o z '0 QJ .~ o 0'\ 0. 0'\ H 0'\ 0 ..-I U !:: - H L!) o >.r.il coE-<N :ECJ) c.'J4-l '0 Z 0 QJ H H P::: ..-I CO 0.. 0. CJ) QJ QJ 01 H>.co 0..l1l0.. . ~ 0'\ 0'\ 0'\ ..-I 00 QJ ~ .~ o QJ CJ)CJ) r.il Z Z H :E 00 '0 !:: o l1l .w U .w QJ !:: on QJ 0 E H QJ 0.. ::.::: :> ...:l00 r.il H ..-I [L,~>, o H CO S :>< ..c: E-<OO1 H . oM Uc.'J::r: P::: . 0'\ 0'\ 0'\ ..-I '- r-i..-l CO H'- QJO'\ .w CO H !:: QJ QJ .w r-i CO ..c:O o ::r: 01 !:: OM r-i OM [L, r.il 5 U Z H 0'\ 000'\ .w0'\ !:: ..-I QJ'- E ..-I 00 00 '- QJO'\ 00 00 ~ ~ QJ !:: .w ;J CO H 0 E-< 01 .w !:: QJ oM Zr-i OM [L, E-< Z r.il :E CJ) CJ) r.il CJ) CJ) ~ o r.il E-< U r.il t-:l o P::: 0.. ~ 0'- 00'\ H l1l .w .. .w QJ o .w H CO E-<O 01 !:: oM r-i OM [L, .w 0\0 000 QJ 0 H ..-I QJ .w\.D !:: H @) .w 0\0 00 0 QJ 0 H ..-I QJ .w\.D !:: H @) 0'\ 0'\ 0'\ ..-I '- ..-I ..w 0\0 000 QJO H ..-I QJ .w\.D !:: H @) .w U H QJ CO r-i (lJ r-i:>< o U 01 !:: H OM CO r-i QJ OM :>< [L, r-i CO .w o E-< COL!)CVlNOCO\.D'<I'CVl..-lO'\['-l!)'<I'N '<I'CO'<l'O\.D..-I[,-CVlO'\L!)O\.DNCO'<l' \.DL!)['-O'\ONCVll!)\.DCOO..-ll"l'<l'\.D Ol!)'<I'CVlCVlN..-IOO'\COCO['-\.DL!)'<I' l"lNNNNNNN..-I..-I..-I..-I..-I..-I..-I U COl!)CVlNOCO\.D'<I'CVl..-lO'\['-L!)'<I'N '<I'CO'<l'O\.D..-I[,-CVlO'\L!)O\.DNCO'<l' CO['-O'\..-IN'<I'L!)['-COONl"lL!)\.DCO \.D..-IOOO'\CO['-\.DL!)L!)'<I'CVlN..-I ..-1..-1..-1..-1 r-i CO 0. OM U C oM H 0.. 000000000000000 000000000000000 CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO l"ll"lCVlCVlCVll"ll"lCVll"ll"lCVlCVll"lCVlCVl ..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1 r-i CO .w o E-< N'<I''<I''<I''<I''<I''<I''<I''<I'CVlCVll''lCVlCVlCO L!)\.DCOON'<I'\.DCOON'<I'\.DCOO..-l N'<I'\.DO'\..-ICVlL!)[,-ON'<I'\.DCO..-lCVl CVl\.DCOOCVlL!)[,-O'\N'<I'\.DCOOCVlL!) COCVlNN..-IOO'\COCO['-\.Dl!)L!)'<I'CVl NNNNNN..-I..-I..-I..-I..-I..-I..-I..-I..-I .0 0\..-1..-1..-1..-1..-1..-1..-1..-1000000 ON '<I'\.DCOON'<I'\.DCOON'<I'\.DCO ['-o\..-ICVlL!)COON'<I'\.DO\..-ICVlL!)['- L!)CO..-lCVlL!)['-ON'<I'\.DCO..-ll"lL!)['- L!)OOO'\CO['-['-\.DL!)'<I'CVll"lN..-I ..-1..-1..-1 r-i CO 0. OM U C OM H 0.. l"lCVlCVlCVlCVlCVlCVlCVlCVll"lCVlCVll"lCVlCO '<I''<I''<I''<I''<I''<I''<I''<I''<I''<I''<I''<I''<I''<I'CVl L!)l!)L!)L!)L!)L!)L!)L!)L!)L!)L!)l!)L!)L!)L!) ['-['-['-['-['-['-['-['-['-['-['-['-['-['-['- NNNNNNNNNNNNNNN ..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1..-1 r-i CO .w o E-< OO..-l..-lNNN NOL!)OL!)OL!) COO\..-I'<I'\.DO\..-I CVl[,-'<I'O\.DNO\ l!)Oo\CO\.DL!)l"l l"ll"lNNNNN CO ['-['-COCOO\O\O ..-I 0\'<1'0\'<1'0\ L!) '<I''<I'['-o\N'<I'['- CONCO'<l'..-I['-CVl NCO\.DL!)'<I'N..-I ..-I r-i CO 0. OM U !:: OM H 0.. l"ll"lCVlCVlCVlCVlN 0000000 '<1''<1''<1''<1''<1''<1''<1' L!)l!)L!)L!)L!)L!)L!) NNNNNNN NNNNNNN O..-lNCVl'<l'l!)\.D['-COo\O..-lNl"l'<l' 0000000000..-1..-1..-1..-1..-1 000000000000000 NNNNNNNNNNNNNNN o\O..-lNCVl'<l'L!)\.D['-COO'\O..-lNCVl 0\0000000000..-1..-1..-1..-1 0\00000000000000 ..-INNNNNNNNNNNNNN ['- CVl N N ..-I CVl ['- CVl N L!) o ..-I 01 !:: OM r-i OM 4-l E o H 'H o o o o .w0 000 QJ N H'- QJ ..-I .wl"l !::'- OM N ..-I 00 QJ 0 '0 .w ;J r-i QJ U .w !:: CO H'O ['- o N U ['- L!) ['- L!) CO CO N 01 !:: 'M ,.-; OM 4-l E o H 4-l ['- ..-I \.D o .w0 000 QJ N H'- QJ ..-I .wCVl !::'- OM N ..-I 00 QJ 0 '0 .w ;J r-i QJ U .w !:: CO H'O N ['- 0\ o '<I' ..-I l"l ..-I 0\ ..-I .0 co ['- 0\ 01 !:: oM r-i oM 4-l '<I' 0'\ 0\ ..-I E o H 4-l co L!) ..-I ['- ..-I '<I' o .w0 00 0 QJ N H'- QJ ..-I .wCVl !::'- OM N ..-I 00 QJ 0 '0 .w ;J ,.-; QJ U .w !:: CO H'O o N CO ['- ['- L!) ..-I CO CJ) ~ o E-< Page 16 'd QJ .w ~~ 0"'\ 1-1 0"'\ 0 r-l U .:: - H L!) Q >,ril rOE-<C"l :8U) CJ'H 'd Z 0 QJ H 1-I~C"l rO P, 0. U) QJ QJ tJl 1-1 >, rO p,j:QP-. . r:t: 0"'\ 0"'\ 0"'\ r-l rIl QJ r:t: .,-i E-< 1-1 o QJ U)U) ril Z Z rIl H'd :8 .:: o - j:Q .w .~~.~ QJ 0 E 1-1 QJ P, ::.:: :> H 00 ril 1-1 r-l 0. Ii< E >, o H rO :;: :>-t ..c: E-<OtJl H ..,-i UCJ:I: ril ~ U Z H H r:t: E-< o E-< E-< Z ril :8 U) U) ril U) U) r:t: Q ril E-< U ril t-::J o ~ P-. 'd rO o ~O"'\ 0"'\ ~O"'\ 1-1 r-l rO--. P, r-l .-i --. rO 0"'\ .,-i 1-1 .w rIl ::l QJ 'd .w .:: rO H Q 1-1 tJl o .:: .,-i .,-i 1-1 .-i QJ .,-i .w Ii< .:: H .w 0\0 rIlO QJ 0 1-1 r-l QJ .wW .:: H @) .w U 1-1 QJ rO .-i QJ .-i:>-t o U tJl .:: 1-1 .,-i rO .-i QJ .,-i :>-t Ii< .-i rO .w o E-< COr--'<!'r-lCO'<!'O'<!'r-lWC"lCO'<!'r-lC"l r--(v)C"lr-lO"'\COr--L!)O"'\C"lWO"'\(V)r--O L!)r--O(V)L!)COr-lOOr-lr-lr-lC"lC"l(v) WOr--(V)O"'\L!)C"l(v)(v)(V)(V)(V)(V)(V)(V) r-lr-lCOW(V)r-lO"'\,<!,(v)C"lr-lOO"'\COr-- r--WL!)L!)L!)L!),<!,C"lC"lC"lC"lC"lr-lr-lr-l .w rIl QJ 1-1 QJ .w .:: H C"lr-lCOL!)C"lCOL!)r-lCO(V)O"'\L!)r-lCO'<!' (V) 0"'\ r--W L!)(V)C"l r-l '<!'COr-lL!)O"'\C"lW COO"'\C"lL!)COr-l'<!'r--r--r--COCOCOO"'\O"'\ r--r-lCO'<!'Or--(V)O"'\O"'\O"'\O"'\O"'\O"'\O"'\O"'\ C"lC"lO"'\r--L!)C"lOr--WL!),<!,(v)C"lr-l (v)C"lr-lr-lr-lr-lr-l .-i rO 0. .,-i U .:: .,-i 1-1 p, WWWWWWl!)(V)(V)(V)(V)(V)(V)(V)CO '<!''<!''<!''<!''<!''<!''<!''<!''<!''<!''<!''<!''<!''<!'(V) r--r--r--r--r--r--r--(V)(V)(V)(V)(V)(V)(V)(V) CO CO CO COCO CO CO (V) (V) (V) (V) (V) (V) (V) (V) COCOCOCOCOCOCOWWWWWWWW (V)(V)(V)(V)(V)(V)(V)r-lr-lrlr-lr-lr-lr-lr-l .-i rO .w o E-< COCOW'<!'C"lOCOW'<!'C"lOCOW'<!'C"l L!)CO'<!'OWC"lr--(V)O"'\L!)r-lWC"lCO'<!' COr--'<!'r-lr--'<!'Or--(V)Or--(V)OW(V) COOO"'\COWL!),<!,C"lr-lOCOr--W'<!'(V) '<!''<!'(V)(V)(V)(V)(V)(V)(v)(v)C''lC''lC''lC''lC''l rO COCOW'<!'C"lOCOW'<!'C"lOCOW'<!'C"l L!)CO'<!'OWC"lr--(V)O"'\L!)r-lWC"lCO'<!' COr--'<!'r-lr--'<!'Or--(V)Or--(V)OW(V) WCOr--W,<!,(v)C"lOO"'\COWL!),<!,C"lr-l C"lr-lr-lr-lr-lr-lr-lr-l .-i rO 0. .,-i U .:: .,-i 1-1 p, 000000000000000 000000000000000 000000000000000 C"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"l C"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"l Or-lC"l(V)'<!'L!)Wr--COO"'\Or-lC"l(v),<!, 0000000000r-lr-lr-lr-lr-l 000000000000000 C"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"l O"'\Or-lC"l(V)'<!'L!)Wr--COO"'\Or-lC"l(v) O"'\OOOOOOOOOOr-lr-lrlr-l 0"'\00000000000000 r-lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"lC"l o '<!' r-- o 0"'\ W L!) o CO r-- C"l W W r-l o W 0"'\ r-- C"l o '<!' co W r-- r-- 0"'\ '<!' tJl .:: .,-i .-i .,-i 'H E o 1-1 'H co W r-- r-- W r-l o .wo rIlO QJ C"l 1-1--' QJ r-l .w(V) '::--' .,-i C"l r-l rIl QJ 0 'd.w ::l .-i QJ U .lJ .:: rO H'd o o o o (V) (V) rO U) ~ o E-< Page 17 . 'd (\) ./-l cO H 0 0"\ 0.. 0"\ H 0"\ 0 rl U . s:: H 0 :>dil cO E-< :EUJ 0 'dZ (\) H H P:: cO 0.. o..UJ (\) H :>, 0.. CO (Y) CXJ N I.D 0 <;j1 CXJ 0"\ 0 tJ1 r-l N 0 r-- (Y) 0 I.D N CXJ N s:: cO rl (Y) 0 CXJ I.D (Y) rl CXJ (Y) -..-I ./-l r-l I.D 0 (Y) N 0 r-- L!) (Y) rl CXJ N ...-1 riI 0 E-< L!) L!) L!) <;j1 <;j1 <;j1 <;j1 (Y) r-- 4-l ~ 0 (Y) N E u "- 0 Z rl H H (Y) cO 4-l "- ./-l 0\0 r-- N I.D 0 <;j1 CXJ N I.D L!) r-- E-< N Ul 0 I.D L!) rl CXJ <;j1 0 r-- (Y) r-- ./-l 0 Z rl (\) 0 <;j1 I.D <;j1 rl 0"\ r-- <;j1 N 0 Ul 0 riI H rl (\) N :E (\) I.D L!) (Y) rl CXJ I.D <;j1 N 0"\ H "- l<ll UJ ./-l I.D rl rl rl rl r-- (\) rl 0"\ UJ (\) s:: ./-l 0"\ riI ./-l H @) s:: "- 0"\ Ul UJ cO -..-I N rl H UJ 0 rl cO l<ll Ul Ul (\) tJ1 r-l I.D I.D I.D I.D I.D I.D I.D (Y) L!) (\) 0 (\) >< 0 s:: cO L!) L!) L!) L!) L!) L!) L!) L!) <;j1 'd ./-l fi ...-1 riI -..-I 0.. I.D I.D I.D I.D I.D I.D I.D I.D N ::l H r-- E-< r-l -..-I r-l (\) 0 (\) U -..-I U I.D I.D I.D I.D I.D I.D I.D I.D (Y) U ./-l UJ UJ H riI Ii< s:: (Y) (Y) (Y) (Y) (Y) (Y) (Y) (Y) 0"\ s:: cO riI 0 t-:J -..-I N H 'd Z -4-l 0 H Z Ul P:: 0.. H 'd Ul 0.. cO :E s:: ./-l 0 s:: CO (\) P:: E . ./-l (\) s:: Ul ./-l (\) Ul U H r-- CXJ 0"\ 0 rl N (Y) <;j1 E (\) (\) cO 0 0 0 rl rl rl rl rl (\) Ul r-l (\) 0 0 0 0 0 0 0 0 :><: :> Ul r-l >< N N N N N N N N H o l<ll 0 UJ riI H U ~ o..'d Ii< E (\) 0 H H tJ1 0 H s:: H I.D r-- CXJ 0"\ 0 rl N (Y) E-< >< (\) -..-I cO 0 0 0 0 rl rl rl rl Page 18 E-< 0 4-l r-l (\) 0 0 0 0 0 0 0 0 H (\) -..-I >< N N N N N N N N U 0 0 Ii< . '0 Q) -I-l m l-l o 0"1 0. 0"1 l-l 0"1 0 .--I U .~ :>tr:t1 m E-< ::8 UJ (') 'Oz Q) H l-l po: m 0.. o.UJ Q) l-l :>t 0.. p:) E-< Z r:t1 ~ fJi 0"1 UJ 0"1 Ii1 O"IrnUJ .--I l-l UJ m ~ rn Q) Q) :>-t Q ~"H r:t1 E-< l-l <ji E-< o Q) .--I U UJUJ r:t1 r:t1 I-J Z 0 Z po: H 0.. ::8 rn '0 rn !:: -I-l o !:: p:) Q) E -I-l Q) !:: rn Q) rn E Q) Q) rn :3 2; ~ r:t1 l-l 0.'0 ""' E Q) o H l-l l-l :>-t Q) E-<04-l H Q) U(')Q po: . r:t1 5 U Z H -I-l - m M .--I o 0J ......... .--I M ......... 0J .--I +J 0\0 rn 0 Q) 0 l-l .--I Q) -I-l\.O !:: H @) Q) -I-l m Q OJ !:: "H .--l "H ""' -I-l U l-l Q) m .--l Q) .--l:>-t o U OJ !:: l-l "H m .--l Q) "H :>-t ""' .--l m -I-l o E-< .--l m 0. "H U !:: "H l-l 0.. <ji o L!) L!) .--I <ji m o L!) 0"1 M 0J <ji L!) L!) .--I 0"1 M <ji .--I o 0J M .--I o 0J <ji o L!) L!) .--I <ji OJ !:: "H .--l "H 4-l E o l-l 4-l o L!) 0"1 M 0J <ji -I-l .--I rn 0 Q) 0J l-l......... Q) .--I -I-lM !::......... "H 0J .--I rn Q) 0 'O-I-l ;::l .--l Q) U -I-l !:: m H'O <ji L!) L!) .--I 0"1 M m UJ ~ o E-< Page 19 . . . THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $5,725,000 CITY OF ELK RIVER, MINNESOTA GENERAL OBLIGATION BONDS, SERIES 1999A (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Monday, June 28, 1999, until 10:00 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 (651) 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 (651) 223-3000 or fax (651) 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. 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 July 1, 1999, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2000. 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: 2001 $460,000 2002 $380,000 2003 $465,000 2004 $455,000 2005 2006 2007 2008 $455,000 $450,000 $440,000 $280,000 2009 2010 2011 2012 $280,000 $275,000 $275,000 $280,000 2013 2014 2015 $280,000 $285,000 $665,000 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 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. Page 20 . . . 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, 2006, and on any day thereafter, to prepay Bonds due on or after February 1, 2007. 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, net revenues of the City's water and sewer utilities and tax increment revenues from the City's Tax Increment Financing District No. 19. The proceeds will be used to finance various improvements within the City. TYPE OF PROPOSALS Proposals shall be for not less than $5,639,125 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 $52,750, 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 Page 21 . 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. 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 22 . . . 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 (651) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 200 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated May 10, 1999 BY ORDER OF THE CITY COUNCIL Isl Sandra Peine Clerk 5/4/999:31 AM Page 23