5.5. SR 06-03-1996_ity of
iver
ITEM 5.5.
MEMORANDUM
FROM:
DATE:
SUBJECT:
Mayor & City Council
Lori Johnson, Asst. City Administrator~
June 3, 1996
Approval of Resolutions Providing for
the Issuance and Sale of the City's
$2,655,000 General Obligation Sewer
Revenue Bond, Series 1996A and
$500,000 General Obligation
Improvement Bond, Series 1996B
On Monday, June 3, the city will receive bids on the sale of two bond issues
previously approved by the City Council. The first issue relates to the
expansion at the Wastewater Treatment Plant, and the second issue is to
fund public improvements in the Hillside Crossing II development.
Dave MacOillivray of Springsted will be available at Monday's Council
meeting to present the bid results. At that time I will also provide the
Council information regarding the city's latest bond rating as determined by
Moody's Investors Service.
A copy of the Official Statement for the above issues is attached for your
information and review. Due to new SEC rules, the city must annually
provide a disclosure document on these issues; the Official Statement will
serve as that document. Continuing Disclosure will be discussed in more
detail at the meeting.
Action Requested
The City Council is asked to approve the two attached resolutions (due to the
length of the resolutions, not all pages are attached) which will award the
sale of the city's $2,655,000 General Obligation Sewer Revenue Bond, Series
1996A and $500,000 General Obligation Improvement Bond, Series 1996B.
council:gobond
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
EXTRACT OF MINUTES OF A MEETING OF TEE
CITY COUNCIL OF THE CITY OF
ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly held in the Elk River City Hall on June 3,
1996, commencing at 6:00 P.M., C.T., in part for the purpose of
considering the offers which had been received for the purchase
of the City's $2,655,000 General Obligation Sewer Revenue Bonds,
Series 1996A.
The following Councilmembers were present:
and the following were absent:
There was then presented a tabulation of the offers
which had been received in the manner specified in the Terms of
Proposal for the Bonds. The offers were as follows:
321121.1
then introduced the following
Resolution and moved its adoption:
RESOLUTION NO.
RESOLUTION PROVIDING FOR THE
ISSUANCE AND SALE OF THE CITY'S
$2,655,000 GENERAL OBLIGATION SEWER REVENUE
BONDS, SERIES 1996A
BE IT RESOLVED by the City Council (the "Council") of
the City of Elk River, Minnesota (the "City"), as follows:
1. Recitals. It is hereby determined:
(a) That the improvements (the "Improvements,,) to the
City's wastewater system and utility have been duly ordered
by the City and have been constructed by the City or will be
constructed under contracts which the City has or will let
therefor, all pursuant to and in accordance with the
applicable provisions of Minnesota Statutes, Section
444.075:
Wastewater Treatment Plant Construction:
Construction Costs
Engineering
Contingency
Less City Cash Contribution
Costs of Issuance
Allowance for Discount
Less Investment Earnings
$3,293,000
197,000
100,000
(1,000,000)
27,434
39,825
(2,259)
Net Bond Issue
$2,655,000
(b) That is it necessary and expedient to the sound
financial management of the affairs of the City that the
City issue its bonds pursuant to Minnesota Statutes, Chapter
475 and Section 444.075, to provide financing for the
Improvements.
(c) The Council desires that the Bonds be issued
initially in "Book Entry Only Form" (as hereinafter
described).
321121.1 2
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COLrNCIL OF THE CITY OF
ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly held in the Elk River City Hall on June 3,
1996, commencing at 6:00 P.M., C.T., in part for the purpose of
considering the offers which had been received for the purchase
of the City's $500,000 General Obligation Improvement Bonds,
Series 1996B.
The following Councilmembers were present:
and the following were absent:
There was then presented a tabulation of the offers
which had been received in the manner specified in the Terms of
Proposal for the Bonds. The offers were as follows:
321094.2
then introduced the
following Resolution and moved its adoption:
RESOLUTION NO.
RESOLUTION PROVIDING FOR THE
ISSUANCE AND SALE OF THE CITY'S
$500,000 GENERAL OBLIGATION IMPROVEMENT
BONDS, SERIES 1996B.
BE IT RESOLVED by the City Council (the "Council") of
the City of Elk River, Minnesota (the "City"), as follows:
1. Recitals. It is hereby determined:
(a) That the following assessable public improvements
(the "Improvements") have been duly ordered by the City and
have been constructed by the City or will be constructed
under contracts which the City has or will let therefor, all
pursuant to and in accordance with the applicable provisions
of Minnesota Statutes, Chapter 429:
Hillside Crossing II Project (including
street and utility improvements):
Project Costs
Less Prepaid Specials
Capitalized Interest
Costs of Issuance
Allowance for Discount
Less Investment Earnings
$596,000
(150,000)
39,500
12,285
6,000
(3,785)
Net Bond Issue
$500,000
(b) That is it necessary and expedient to the sound
financial management of the affairs of the City that the
City issue its bonds pursuant to Minnesota Statutes,
Chapters 429 and 475, to provide financing for the
Improvements.
(c) The Improvements and all their components have
been ordered on or prior to the date hereof, after a hearing
thereon (except where not required by law) for which mailed
and published notice was duly given as required by law
describing the Improvements and all their components by
general nature, estimated cost, and area to be assessed.
(d) The Council desires that the Bonds be issued
initially in "Book Entry Only Form" (as hereinafter
described).
321094.2 2
85/38/% 17:SZ:BZ Z1Z-553-4BBB-> 44174Z5 Moodg's Investors Page flBZ
Moody's Municipal
Daily Rating Recap
Elk River, Minnesota Rating date: May 30, 1996
Moody's rating: Baal
$2,655,000 General Obligation Sewer Revenue Bonds, Series 1996A
$500,000 General Obligation Improvement Bonds, Series 1996B
Sale: $3,155,000
Date of Sale: June 3
Type: Competitive
Security: General obligation, unlimited tax.
Use of Proceeds: Construction of waste water plant
and street improvements.
Last Rating change: December 1974: Baa to Baal
Update of related ratings:
Elk River, Minnesota
Moody's rating: A
General Obligation State Aid Road Bonds
Elk River Economic Development Authority,
Minnesota
Moody's rating: Baa
City Hall and Law Enforcement Facility Revenue Bonds
Credit Comment: The Baa 1 rating assigned to the
general obligation bonds of the City of Elk River has
been confirmed based on the following credit factors:
Financial Operations Remain Satisfactory Despite
pressures of Rapid Growth
Pressures continue to be evident in this rapidly growing
community. Attention to careful planning and conserva-
tive budgeting have allowed the maintenance of satisfac-
tory reserve positions and afforded flexibility in meeting
growth related pressures, in particular the continued
monitoring of capital, personnel, and service needs.
Debt Position Relects Growing Community
With the current issuance, both debt burden and per
capita debt remain well above the medians for cities of
similar population size. The city expects to issue $2.1
million in general obligation ice arena bonds within the
next 90 days. Additional general obligation backed, spe-
cial assessment, and tax increment debt is likely to be
issued over the next several years. The results of studies
currently being undertaken for extension of utilities and
and other infrastructure needs will determine the extent
of future borrowing. Support from special assessments,
utility enterprise revenues, and tax increments for most
of the city's outstanding general obligation debt allevi-
ates pressure on the property tax rate.
Proximity to the Twin City Metro Area Fosters Growth
The city benefits from its close proximity to the Minne-
apolis-St. Paul metropolitan area, as evidenced, in part,
by its rapid population growth and continuing economic
diversification. Additional growth is expected since the
city remains almost two-thirds undeveloped. Resident
income levels and housing values are above those of the
state in general, and traditionally, county unemployment
rates have exceeded state averages.
At this time, we have also reviewed and confirmed the A
rating on city's general obligation state aid road bonds,
which are secured by both the city's general obligation
pledge and state road aid allomaents, mad the Baa rating
on the Elk River Economic Development Authority's
City Hall and Law Enforcement Facility Revenue Bonds,
which are backed by the city's annual budget
appropriations.
85 E. SEVENTH PLACE, SUITE 100
SAINT PAUL, MN 55101-2143
612-223-3000 FAX: 61N223-3002
SPRINGSTED
Pub§c Finance Advisors
AWARD:
$2,655,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION SEWER REVENUE BONDS, SERIES 1996A
(Book Entry Only)
DEAN WITTER REYNOLDS INCORPORATED
ABN AMRO SECURITIES (USA) INC.
PRUDENTIAL SECURITIES, INC.
OPPENHEIMER & CO., INC.
PAINEWEBBER INCORPORATED
SALE: June 3, 1996
Moody's Rating: Aaa
AMBAC Insured
Interest Net Interest True Interest
Bidder Rates Price Cost Rate
DEAN WITTER REYNOLDS
INCORPORATED
ABN AMRO SECURITIES (USA) INC.
PRUDENTIAL SECURITIES, INC.
OPPENHEIMER & CO., INC.
PAINEWEBBER INCORPORATED
5.00% 1997-2004
5.10% 2005
5.20% 2006
5.30% 2007
5.40% 2008
5.50% 2009
5.60% 2010
5.65% 2011
5.70% 2012
5.75% 2013
5.80% 2014-2016
$2,615,177.75 $1,751,192.67 5.7352%
(Continued)
SAINT PAUL, MN · MINNEAPOLIS, MN - BROOKFIELD, WI . OVERLAND PARK, KS · WASHINGTON, DC . IOWA C1TY, IA
Interest Net Interest True Interest
Bidder Rates Price Cost Rate
FBS INVESTMENT SERVICES, INC.
NORWEST INVESTMENT SERVICES, INC.
JURAN & MOODY, INC.
DOUGHERTY DAWKINS, INC.
NORWEST INVESTMENT SERVICES, INC.
John G. Kinnard & Company Incorporated
Peterson Financial Corporation
4.00% 1997
4.25% 1998
4.40% 1999
4.55% 2000
4.70% 2001
4.80% 2002
4.90% 2003
5.00% 2004
5.10% 2005
5.20% 2006
5.30% 2007
5.40% 2008
5.50% 2009
5.60% 2010
5.70% 2011
5.75% 2012
5.80% 2013
5.85% 2014
5.90% 2015-2016
4.00% 1997
4.25% 1998
4.50% 1999
4.60% 2000
4.70% 2001
4.80% 2002
4.90% 2003
5.00% 2004
5.10% 2005
5.20% 2006
5.30% 2007
5.40% 2008
5.50% 2009
5.60% 2010
5.70% 2011
5.75% 2012
5.80% 2013
5.90% 2014-2016
$2,615,175.00 $1,756,893.33 5.7424%
$2,615,175.00 $1,758,900.63 5.7489%
PIPER JAFFRAY INC.
ROBERT W. BAIRD & COMPANY,
INCORPORATED
EDWARD D. JONES & COMPANY
5.00% 1997-2003
5.10% 2004
5.20% 2005
5.30% 2006
5.40% 2007
5.50% 2008
5.60% 2009
5.65% 2010
5.70% 2011
5.75% 2012
5.80% 2013
5.85% 2014
5.90% 2015-2016
$2,615,175.00 $1,773,005.42 5.8055%
(C(
Interest Net Interest True Interest
Bidder - Rates Price Cost Rate
SMITH BARNEY
CRONIN & COMPANY, INCORPORATED
4.10% 1997
4.30% 1998
4.50% 1999
4.60% 2000
4.70% 2001
4.80% 2002
4.90% 2003
5.00% 2004
5.10% 2005
5.20% 2006
5.35% 2007
5.45% 2008
5.55% 2009
5.65% 2010
5.75% 2011
5.85% 2012
5.95% 2013
6.00% 2014-2016
$2,615,175.00 $1,781,400.42 5.8184%
DAIN BOSWORTH INCORPORATED
5.25% 1997-2005
5.30% 2006
5.40% 2007
5.50% 2008
5.60% 2009
5.70% 2010
5.80% 2011
5.90% 2012
6.00% 2013-2016
$2,615,175.00 $1,806,235.21 5.9151%
REOFFERING SCHEDULE OF THE PURCHASER
Rate Year Yield
5.00% 1997 4.00%
5.00% 1998 4.25%
5.00% 1999 4.50%
5.00% 2000 4.60%
5.00% 2001 4.70%
5.00% 2002 4.80%
5.00% 2003 4.90%
5.00% 2004 5.00%
5.10% 2005 5.10%
5.20% 2006 5.20%
5.30% 2007 5.35%
5.40% 2008 5.45%
5.50% 2009 5.55%
5.60% 2010 5.65%
5.65% 2011 5.70%
5.70% 2012 5.75%
5.75% 2013 5.80%
5.80% 2014 5.85%
5.80% 2015 5.90%
5.80% 2016 5.90%
BBh 5.87%
Average Maturity: 11.56 Years
85 E. SEVENTH PLACE, SUITE 100
SAINT PAUL, MN 55101-2143
612-223-3000 FAX: 612-223-3002
SPRINGSTED
Public Finance Advisors
AWARD:
$500,000
CITY OF ELK RIVER, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1996B
(Book Entry Only)
FBS INVESTMENT SERVICES, INC.
SALE: June 3, 1996 Moody's Rating: Baa-1
Interest Net Interest True Interest
B i d d e r Rates P ri ce C o st Rate
FBS INVESTMENT SERVICES, INC. 4.50% 1999 $495,750.00 $120,502.50 5.0472%
4.70% 2000
4.80% 2001
4.90% 2002
5.00% 2003-2004
NORWEST INVESTMENT SERVICES, INC.
John G. Kinnard & Company
Incorporated
Peterson Financial Corporation
4.60% 1999
4.70% 2000
4.80% 2001
4.90% 2002
5.00% 2003
5.10% 2004
$494,000.00 $123,106.25 5.1677%
DAIN BOSWORTH INCORPORATED
4.90% 1999-2002
5.00% 2003
5.10% 2004
$494,000.00 $124,992.08 5.2512%
These Bonds are being reoffered at par.
BBh 5.87%
Average Maturity: 4.79 Years
SAINT PAUL, MN · MINNEAPOLIS, MN · BROOKFIELD, WI . OVE1LLAND PARK, KS · WASHINGTON, DC . IOWA CITY, IA