7.4. SR 05-02-1994
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Agenda Item 7.4.
MEMORANDUM
TO:
MAYOR & CITY COUNCIL ~
LORI JOHNSON, FINANCE DIRECTOR ~~
FROM:
DATE:
APRIL 28, 1994
SUBJECT:
RESOLUTIONS INITIATING THE PROCESS
FOR THE SALE OF THE CITY'S $3,495,000
GO IMPROVEMENT BONDS, SERIES 1994A;
$1,280,000 GO SEWER REVENUE BONDS,
SERIES 1994B; AND $1,080,000 GO STORM
SEWER REVENUE BONDS, SERIES 1994C
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Attached you will find the Resolutions initiating the process for the sale of each of the
above-referenced bond issues. The City's fiscal advisor for the issues is Springsted, Inc.
A copy of Springsted's Recommendations for the three bond issues is attached. I will
briefly highlight each of the bond issues and also address the library expansion financing
later in this memo.
$3~495~000 GO Improvement Bond~ Series 1994A
These bonds are being issued to finance the improvements related to the Elk Park Center
development. As we have previously discussed, the estimated total project cost is
$3,776,000. Of this, approximately $600,000 will be received in turnback funds and the
remainder will be assessed to the developer and other benefiting property owners. Total
assessments for the project equal approximately $3,385,000. Target has agreed to prepay
its assessment of approximately $600,000. After taking into consideration the assessment
prepayment, adding capitalized interest and issuance costs, the bond issue requirement is
$3,495,000. At the developers request, the City has agreed to delay payment of the first
installment of the special assessments which will be levied in 1994 until May, 1996. This
requested one year payment delay necessitates the addition of a substantial amount of
capitalized interest to be included in the bond issue.
$1~280,000 GO Sewer Revenue Bond. Series 1994B
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The second Resolution authorizes the issuance of sewer revenue bonds to finance the
interim expansion at the treatment plant. As you will recall, the bids were approximately
$80,000 less than the estimated $1,000,000 construction cost. Due to timing, the size of
this issue has remained at $1,280,000 which is the original estimate. Any proceeds not
P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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this issue has remained at $1,280,000 which is the original estimate. Any proceeds not
used for the interim plan may be used to finance other allowable sewer projects such as the
Highway 10 lift station, the UV system, or the second phase of the expansion.
The revenue bonds indicate that the City has approved a sewer rate increase in order to
adequately service the debt on the bond. If revenues are not sufficient for some reason,
the City is required to levy an ad valorem tax to meet the required bond payments. At this
time, it is not anticipated that any tax levy will be required during the life of these bonds.
$1.080.000 GO Storm Sewer Revenue Bond. Series 1994C
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The City Council has given approval for various storm sewer improvements including the
Highway 10 and 169/101 improvements at a cost of approximately $490,000, the
Deerfield III improvements at a cost of approximately $178,000, and the County Road 12
and 13 improvements at an estimated cost of $400,000. Originally it was hoped that some
of the costs previously incurred could be recaptured through this bond issue; however, the
Highway 10 and 169 improvements were awarded at approximately $80,000 over the
original estimate. Again, due to the timing of the receipt of this information, the bond
issue was not resized to include that $80,000. Hopefully, the County Road 12 and 13
improvements will be less than the estimated $400,000 so that any remaining bond
proceeds can be used to offset previous costs incurred. If not, the monthly utility fee
which is collected and not pledged to debt service payments can be used to recapture
those costs.
For projection purposes, we have assumed that $175,000 in utility fees will be collected
annually. Under that assumption, the City will have funds available to issue another
$600,000 of debt in 1995. However, this means that no additional funds will be available
for storm sewer projects until 2010. It is assumed that the $175,000 revenue figure is
very conservative and that the figure will be closer to $200,000 or more. In any regard,
the Council will need to seriously evaluate upcoming storm sewer projects and the need
for additional bond issues prior to setting the surface water management utility fee which
is to start being billed later this summer.
Librarv Exoansion Financine
In previous discussions about library financing and the other bonding needs required in
1994, it was anticipated that library expansion tax increment bonds would be issued jointly
with the other bond issues. However, due to some legal technicalities, the timing on that
has been delayed approximately one to two months. This will not in any way affect the
current plans for a library expansion as the library fund itself is contributing approximately
$130,000 and a tax increment amendment was approved in August, 1993, authorizing the
use of $177,000. Therefore, adequate cash will be available to finance the construction.
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As I mentioned, a TIP amendment was approved in August, 1993, allowing the use of
$177,000 for construction of the library. However the tax increment amendment does not
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reference the fact that bonds will be issued for the project nor does it reference the fact
that a portion of the principal and interest on the bonds must be paid by tax increment
revenues. The reason the amendment does not address these two issues is that the
information City staff received from its consultants when preparing for the financing was
that an up front cash contribution to write down the bond amount was all that was
necessary in order to qualify for the issuance of tax increment bonds. At that time it was
understood that the 20 percent debt service pledge would be offset by the cash
contribution. However, bond counsel has very recently decided that a cash contribution
for construction does not negate the requirement for a pledge of 20 percent of the
principal and interest.
In order to meet the 20 percent requirement, the TIF NO.1 and No.3 amendment adopted
August 2, 1993, needs to be amended. It is anticipated that the amendment will be
distributed to the County and School board by May 13. This would set the public hearing
date for June 20 and provide bond proceeds in late July. This would meet the cash flow
needs of the library expansion. Duplicate issuance costs would be eliminated by including
disclosure on the TIF bond in the Official Statement prepared for the other issues,
including a rating request for the TIF bond on the current rating application to Moody's
and negotiating with the low bidder on the other issues to also underwrite the library issue.
Alternately, the bonds could be sold through private placement to a local bank eliminating
the need for a rating, Official Statement, or separate placement.
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Unfortunately, the change to the TIF bond requirement information received earlier will
cause additional work and delay receipt of bond funds. Fortunately it will not affect
construction on the expansion.
RECOMMENDATION
The Council is asked to approve the three bond resolutions as presented.
The Council is asked to adopt a motion authorizing an amendment correcting the earlier
Library Expansion Amendment to TIF NO.1 and No.3. Finally, the council is asked to
set a public hearing for June 20, 1994, on the amendment.
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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 called and held at the Elk River City Hall on
May 2, 1994, commencing at P.M., C.T.
The following Councilmembers were present:
and the following were absent:
Councilmember
following resolution and moved its adoption:
introduced the
RESOLUTION NO.
RESOLUTION INITIATING THE PROCESS FOR THE SALE
OF THE CITY'S $3,495,000 GENERAL OBLIGATION
IMPROVEMENT BONDS, SERIES 1994A
BE IT RESOLVED by the City Council (the "Council") of the
City of Elk River (the "city"), Minnesota, as follows:
1. It is hereby determined:
(a) The City has duly ordered the making of and has
undertaken or will undertake the assessable public
improvements described in the attached Exhibit A (the
"Improvements") within the City pursuant to and in full
conformity with Minnesota Statutes, Chapter 429.
(b) It is necessary for the City to issue its
$3,495,000 General Obligation Improvement Bonds, Series
1994A (the "Bonds"), pursuant to Minnesota Statutes,
Chapters 429 and 475, to provide financing for the
Improvements.
(c) The City has retained Springsted Incorporated,
in Saint Paul, Minnesota ("Springsted") , as its
independent financial advisor for the Bonds and is
therefore authorized to sell the Bonds by a competitive
negotiated sale in accordance with Minnesota Statutes,
section 475.60, Subdivision 2(9).
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2. The terms and conditions of the Bonds and the sale thereof
are fully set forth in the "Terms of Proposal" attached hereto as
Exhibit B, and the Council shall meet at the time and place
specified therein for the purposes of considering the bids for the
purchase of the Bonds and considering the award of the sale of the
Bonds.
Adopted on May 2, 1994, by the Elk River city Council.
The motion for the adoption of the foregoing resolution was
duly seconded by Councilmember 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.
262807. 1
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Exhibit A
Re:
$3,495,000 G.O. Improvement Bonds, Series 1994A
street, Water, Sanitary Sewer and Storm Sewer Public Improvements
(Elk Park Center Project):
Total Construction Costs
Less Prepaid Assessments
$3,768,544
(610.000)
Net Project Costs
Costs of Issuance
Capitalized Interest (through
2/1/96)
Allowance for Discount
$3,158,544
28,980
266,035
45.435
Subtotal
Less Estimated Investment
Earnings
$3,498,994
(3.994)
Net Bond Issue
$3,495,000
262816.1
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Exhibit B
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS Will BE RECEIVED ON THE FOllOWING BASIS:
TERMS OF PROPOSAL
$3,495,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS,
SERIES 1994A
Proposals for the Bonds will be received on Monday, May 23, 1994, until 12:00 Noon, 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 7:00 P.M., Central Time, of the same day.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1994, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1995. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. The Bonds will be
issued in the denomination of $5,000 each, or in integral multiples thereof, as requested by the
purchaser, and fully registered as to principal and interest. Principal will be payable at the main
corporate office of the registrar and interest on each Bond will be payable by check or draft of
the registrar mailed to the registered holder thereof at the holder's address as it appears on the
books of the registrar as of the close of business on the 15th day of the immediately preceding
month.
The Bonds will mature February 1 in the years and amounts as follows:
1996 $530,000
1997 $270,000
1998 $220,000
1999 $225,000
2000 $235,000
2001 $245,000
2002 $140,000
2003 $160,000
2004 $180,000
2005 $195,000
2006 $190,000
2007 $185,000
2008 $185,000
2009 $180,000
2010 $180,000
2011 $175,000
OPTIONAL REDEMPTION
The City may elect on February 1, 2004, and on any day thereafter, to prepay Bonds due on or
after February 1, 2005. Redemption may be in whole or in part and if in part, at the option of
the City and in such order as the City shall determine and within a maturity by lot as selected by
the registrar. 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 infrastructure
improvements within the City.
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TYPE OF PROPOSALS
e Proposals shall be for not less than $3.449,565 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 $34,950,
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.
AWARD
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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.
REGISTRAR
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The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
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CUSIP NUMBERS
e 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, which opinion will be
printed on the Bonds, 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.
OFFICIAL STATEMENT
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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 140 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 2, 1994
BY ORDER OF THE CITY COUNCIL
/s/ Patrick Klaers
Administrator
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City Clerk's certificate
I, the undersigned, being the duly qualified and acting
City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY
that I have carefully 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 excerpt of the official
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 authorizing the sale of the City's General Obligation
Improvement Bonds, Series 1994A.
WITNESS my hand as such City Clerk and the official seal
of the City this ____ day of , 1994.
(SEAL)
262807. 1
City Clerk
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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 called and held at the Elk River City Hall on
May 2, 1994, commencing at P.M., C.T.
The following Councilmembers were present:
and the following were absent:
Councilmember
following resolution and moved its adoption:
introduced the
RESOLUTION NO.
RESOLUTION INITIATING THE PROCESS FOR THE SALE
OF THE CITY'S $1,280,000 GENERAL OBLIGATION
SEWER REVENUE BONDS, SERIES 1994B
BE IT RESOLVED by the City Council (the "Council") of the
City of Elk River (the "city"), Minnesota, as follows:
1. It is hereby determined:
(a) The City has duly ordered the making of and has
undertaken or will undertake the public improvements
described in the attached Exhibit A (the "Improvements")
within the City pursuant to and in full conformity with
Minnesota Statutes, Section 444.075.
(b) It is necessary for the City to issue its
$1,280,000 General Obligation Sewer Revenue Bonds, Series
1994B (the "Bonds"), pursuant to Minnesota Statutes,
section 444.075 and Chapter 475, to provide financing for
the Improvements.
(c) The City has retained Springsted Incorporated,
in Saint Paul, Minnesota ("Springsted"), as its
independent financial advisor for the Bonds and is
therefore authorized to sell the Bonds by a competitive
negotiated sale in accordance with Minnesota Statutes,
section 475.60, Subdivision 2(9).
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2. The terms and conditions of the Bonds and the sale thereof
are fully set forth in the "Terms of Proposal" attached hereto as
Exhibit B, and the Council shall meet at the time and place
specified therein for the purposes of considering the bids for the
purchase of the Bonds and considering the award of the sale of the
Bonds.
Adopted on May 2, 1994, by the Elk River City Council.
The motion for the adoption of the foregoing resolution was
duly seconded by Councilmember 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.
262817.1
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Exhibit A
Re:
$1,280,000 G.O. Sewer Revenue Bonds, Series 1994B
Interim Expansion of City's Wastewater Treatment Plant:
262816.1
Project Costs
Costs of Issuance
Allowance for Discount
Net Bond Issue
$1,245,970
17,390
16.640
$1,280,000
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Exhibit B
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS Will BE RECEIVED ON THE FOllOWING BASIS:
TERMS OF PROPOSAL
$1,280,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION SEWER REVENUE BONDS,
SERIES 1994B
Proposals for the Bonds will be received on Monday, May 23, 1994, until 12:00 Noon, 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 7:00 P.M., Central Time, of the same day.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1994, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1995. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. The Bonds will be
issued in the denomination of $5,000 each, or in integral multiples thereof, as requested by the
purchaser, and fully registered as to principal and interest. Principal will be payable at the main
corporate office of the registrar and interest on each Bond will be payable by check or draft of
the registrar mailed to the registered holder thereof at the holder's address as it appears on the
books of the registrar as of the close of business on the 15th day of the immediately preceding
month.
The Bonds will mature February 1 in the years and amounts as follows:
1996 $65,000
1997 $70,000
1998 $70,000
1999 $75,000
2000 $80,000
2001 $85,000
2002 $85,000
2003 $90,000
2004 $ 95,000
2005 $100,000
2006 $105,000
2007 $115,000
2008 $120,000
2009 $125,000
OPTIONAL REDEMPTION
The City may elect on February 1, 2004, and on any day thereafter, to prepay Bonds due on or
after February 1, 2005. Redemption may be in whole or in part and if in part, at the option of
the City and in such order as the City shall determine and within a maturity by lot as selected by
the registrar. 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 its sewer utility. The proceeds will be used to finance expansion of the wastewater
treatment plant.
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TYPE OF PROPOSALS
Proposals shall be for not less than $1,263,360 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 $12,800,
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.
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.
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.
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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, which opinion will be
printed on the Bonds, 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. .
OFFICIAL STATEMENT
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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 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 May 2, 1994
BY ORDER OF THE CITY COUNCIL
Isl Patrick Klaers
Administrator
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City Clerk's certificate
I, the undersigned, being the duly qualified and acting
City Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY
that I have carefully 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 excerpt of the official
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 authorizing the sale of the City's General Obligation
Sewer Revenue Bonds, Series 1994B.
WITNESS my hand as such City Clerk and the official seal
of the City this ____ day of , 1994.
(SEAL)
262817.1
City Clerk
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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 called and held at the Elk River City Hall on
May 2, 1994, commencing at P.M., C.T.
The following Councilmembers were present:
and the following were absent:
Councilmember
following resolution and moved its adoption:
introduced the
RESOLUTION NO.
RESOLUTION INITIATING THE PROCESS FOR THE SALE
OF THE CITY'S $1,080,000 GENERAL OBLIGATION
STORM SEWER REVENUE BONDS, SERIES 1994C
BE IT RESOLVED by the City Council (the "Council") of the
City of Elk River (the "city"), Minnesota, as follows:
1. It is hereby determined:
(a) The City has duly ordered the making of and has
undertaken or will undertake the public improvements
described in the attached Exhibit A (the "Improvements")
within the City pursuant to and in full conformity with
Minnesota Statutes, section 444.075.
(b) It is necessary for the City to issue its
$1,080,000 General Obligation Storm Sewer Revenue Bonds,
Series 1994C (the "Bonds"), pursuant to Minnesota
Statutes, Section 444.075 and Chapter 475, to provide
financing for the Improvements.
(c) The City has retained Springsted Incorporated,
in Saint Paul, Minnesota ("Springsted") , as its
independent financial advisor for the Bonds and is
therefore authorized to sell the Bonds by a competitive
negotiated sale in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(9).
262818.1
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2 . The terms and conditions of the Bonds and the sale thereof
are fully set forth in the "Terms of Proposal" attached hereto as
Exhibit B, and the Council shall meet at the time and place
specified therein for the purposes of considering the bids for the
purchase of the Bonds and considering the award of the sale of the
Bonds.
Adopted on May 2, 1994, by the Elk River City Council.
The motion for the adoption of the foregoing resolution was
duly seconded by Councilmember 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.
262818.1
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Exhibit A
Re:
$1,080,000 G.O. storm Sewer Revenue Bonds, Series 1994C
1994 Storm Sewer Improvement Project
Project Costs
Costs of Issuance
Allowance for Discount
Net Bond Issue
262816.1
$1,049,090
16,870
14.040
$1,080,000
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Exhibit 8
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS Will BE RECEIVED ON THE FOllOWING BASIS:
TERMS OF PROPOSAL
$1,080,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION STORM SEWER REVENUE BONDS,
SERIES 1994C
Proposals for the Bonds will be received on Monday, May 23, 1994. until 12:00 Noon, 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 7:00 P.M., Central Time, of the same day.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1994, as the date of original issue, and will bear interest
payable on June 1 and December 1 of each year, commencing June 1, 1995. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Bonds will be issued in
the denomination of $5,000 each, or in integral multiples thereof, as requested by the
purchaser, and fully registered as to principal and interest. Principal will be payable at the main
corporate office of the registrar and interest on each Bond will be payable by check or draft of
the registrar mailed to the registered holder thereof at the holder's address as it appears on the
books of the registrar as of the close of business on the 15th day of the immediately preceding
month.
The Bonds will mature December 1 in the years and amounts as follows:
1995 $25,000
1996 $55,000
1997 $55,000
1998 $60,000
1999 $60,000
2000 $65,000
2001 $65,000
2002 $70,000
2003 $75,000
2004 $80,000
2005 $85,000
2006 $85,000
2007 $ 95,000
2008 $100,000
2009 $105,000
OPTIONAL REDEMPTION
The City may elect on December 1, 2004, and on any day thereafter, to prepay Bonds due on
or after December 1, 2005. Redemption may be in whole or in part and if in part, at the option
of the City and in such order as the City shall determine and within a maturity by lot as selected
by the registrar. 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 its storm sewer utility. The proceeds will be used to finance various improvements
to the City's storm sewer system.
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TYPE OF PROPOSALS
e Proposals shall be for not less than $1,065,960 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 $10,800,
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.
AWARD
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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.
REGISTRAR
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The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
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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, which opinion will be
printed on the Bonds, 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.
OFFICIAL STATEMENT
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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 45 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 2, 1994
BY ORDER OF THE CITY COUNCIL
Isl Patrick Klaers
Administrator
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City Clerk's certificate
I, the undersigned, being the duly qualified and acting
city Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY
that I have carefully 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 excerpt of the official
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 authorizing the sale of the City's General Obligation
storm Sewer Revenue Bonds, Series 1994C.
WITNESS my hand as such City Clerk and the official seal
of the City this day of , 1994.
city Clerk
(SEAL)
262818.1