HomeMy WebLinkAbout9.b. 2005B G.O. Equipment Certificates of Indebtedness Issue - Authorizing Issuance and Setting SaleAGENDA ITEM: 20056 G.O. Equipment Certificates of
Indebtedness Issue Authorizing
Issuance and Setting Sale
AGENDA SECTION:
Old Business
PREPARED BY: Jeff May, Finance Director
AGE ftF
ATTACHMENTS: Resolution (Recommendations Included
with Previous Agenda Item); Letter from
Financial Consultant
APPROVED BY:
RECOMMENDED ACTION: Motion to adopt RESOLUTION PROVIDING FOR
COMPETITIVE NEGOTIATED SALE OF $1,535,000 GENERAL OBLIGATION
EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B.
HE
ACTION:
City Council Meeting Date: April 5, 2005
CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
ISSUE The authorization to issue bonds for equipment certificates for the
purchase of equipment and the consolidation of a previous lease- purchase of equipment.
BACKGROUND This item is on the agenda for your consideration in authorizing the
issuance and setting the sale of General Obligation Equipment Certificates of Indebtedness.
The City Council authorized staff in December of 2004 to proceed with the purchase of the
equipment and the financing necessary to complete the acquisitions in the form of a lease
purchase With the rise in interest rates in the last 2 or 3 months, our financial consultant felt
that it may be in the City's best interests (see attached letter) to consider using the equipment
certificates as a financing tool versus the lease purchase. They also felt that it would be in
our best interests to roll in the lease purchase that we did in 2001 to lower that interest rate
as well. We have $115,000 annually in the CIP budget for the repayment of the 2001 lease
purchase through the year 2011. We have $140,000 annually in the CIP budget for the
repayment of the 2005 lease- purchase through the year 2016. This would have obligated the
CIP budget for $255,000 through 2011 and $140,000 from 2012 through 2016. By combining
these two into one equipment certificate issue the annual CIP requirement would be
$335,000 through the year 2010 (equipment certificates can only be five years in length).
Therefore we are looking at an additional $80,000 annually for the next five years with the
benefit of no payments after 2010 Another positive to consider is that we have two other
lease purchases that are almost paid off that will help negate that $65,000 impact. 2005 is
the final $50,800 levy for a lease- purchase completed in 1995 and 2006 is the final $64,900
levy for a lease- purchase completed in 1996. My numbers are slightly different from Al's
because he used the actual payments and I used numbers that we have budgeted.
Bids will be open until Tuesday, May 24, 2005, at 11:00 A.M. at the offices of Springsted
Incorporated. The bids will be tabulated there and then consideration for award of the Bonds
will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUMMARY
Recommend the above motion.
4
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2005
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF
INDEBTEDNESS, SERIES 2005B
WHEREAS, the City Council of the City of Rosemount, Minnesota, has heretofore determined
that it is necessary and expedient to issue its $1,535,000 General Obligation Equipment
Certificates of Indebtedness, Series 2005B (the "Certificates to finance the acquisition of
vanous items of capital equipment; and
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 m accordance with Minnesota Statutes, Section
475 60, Subdivision 2(9), and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount,
Minnesota, as follows.
1. Authorization; Findings The City Council hereby authorizes Springsted to solicit bids
for the competitive negotiated sale of the Certificates.
2. Meeting; Bid Opening. This City Council shall meet at the time and place specified in
the Terms of Proposal attached hereto as Exhibit A for the purpose of considering sealed bids
for, and awarding the sale of, the Certificates. The Administrator, or his designee, shall open
bids at the time and place specified m such Terms of Proposal.
3. Terms of Proposal. The terms and conditions of the Certificates and the negotiation
thereof are fully set forth m the "Terms of Proposal' attached hereto as Exhibit A and hereby
approved and made a part hereof.
4. Official Statement. In connection with said competitive negotiated sale, the
Administrator, Finance Director and other officers or employees of the City are hereby
authorized to cooperate with Springsted and participate in the preparation of an official statement
for the Certificates, and to execute and deliver it on behalf of the City upon its completion.
1754058v1
ADOPTED this 5th day of April, 2005.
ATTEST
Linda J. Jentink, City Clerk
William H Droste, Mayor
Motion by: Seconded by:
Voted in favor:
Voted Against
Members Absent:
1754058v1 2
STATE OF MINNESOTA
COUNTY OF DAKOTA ss
CITY OF ROSEMOUNT
I, Linda J. Jentmk, duly appointed, acting and qualified City Clerk of the City of Rosemount do
hereby certify that I have examined the City of Rosemount records and the Minute Book of said
City for the meeting of the 5th of Apnl, 2005 and that the attached copy of the Resolution 2005B
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF
$1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF
INDEBTEDNESS, SERIES 2005B was approved and is a true and correct copy of the City
Proceedings relating to said Resolution.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of said City this day of
April, 2005.
1754058v1
CERTIFICATE
Linda J. Jentink, City Clerk
City of Rosemount
Dakota County, Minnesota
EXHIBIT A
TERMS OF PROPOSAL
$1,535,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION EQUIPMENT CERTIFICATES
OF INDEBTEDNESS, SERIES 2005B
(BOOK ENTRY ONLY)
Proposals for the Certificates will be received on Tuesday, May 24, 2005, until 11:00 A.M.,
Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint
Paul, Minnesota, after which time they will be opened and tabulated. Consideration for award of
the Certificates will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Spnngsted will assume no liability for the inability of the bidder to reach Springsted prior to the
time of sale specified above. Al] bidders are advised that each Proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Certificates regardless of
the manner in which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223 -3046
to Springsted Signed Proposals, without final price or coupons, may be submitted to Springsted
prior to the time of sale. The bidder shall be responsible for submitting to Spnngsted the final
Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in
the submitted Proposal.
OR
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARITY. For purposes of the electronic bidding process, the time as maintained by PARITY
shall constitute the official time with respect to all Bids submitted to PARITY Each bidder
shall he solely responsible for making necessary arrangements to access PARITY for purposes
of submitting its electronic Bid in a timely manner and in compliance wzth the requirements of
the Terms of Proposal. Neither the City, its agents nor PARITY shall have any duty or
obligation to undertake registration to bid for any prospective bidder or to provide or ensure
electronic access to any qualified prospective bidder, and neither the City, its agents nor
PARITY shall be responsible for a bidder's failure to register to bid or for any failure in the
proper operation of, or have any liability for any delays or interruptions of or any damages
caused by the services of PARITY The City is using the services of PARITY solely as a
communication mechanism to conduct the electronic bidding for the Certificates, and PARITY
is not an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARITY this
Terms of Proposal shall control. Further information about PARITY including any fee
charged, may be obtained from:
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PARITY 1359 Broadway, 2 Floor, New York, New York 10018
Customer Support: (212) 849 -5000
DETAILS OF THE CERTIFICATES
The Certificates will be dated June 15, 2005, as the date of original issue, and will bear interest
payable on June 1 and December 1 of each year, commencing December 1, 2005. Interest will be
computed on the basis of a 360 -day year of twelve 30 -day months.
The Certificates will mature June 1 in the years and amounts as follows:
2006 5290,000 2008 $305,000 2009 $315,000 2010 $325,000
2007 $300,000
BOOK ENTRY SYSTEM
The Certificates will be issued by means of a book entry system with no physical distribution of
Certificates made to the public The Certificates will be issued in fully registered form and one
Certificate, representing the aggregate principal amount of the Certificates maturing m 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 Certificates.
Individual purchases of the Certificates may be made in the pnncipal amount of $5,000 or any
multiple thereof of a single maturity through book entnes made on the books and records of DTC
and its participants. Pnncipal and interest are payable by the registrar to DTC or its nominee as
registered owner of the Certificates. Transfer of principal and interest payments to participants
of DTC will be the responsibility of DTC, transfer of pnncipal 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 Certificates, will
be required to deposit the Certificates 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 Certificates will not be subject to payment m advance of their respective stated maturity
dates
SECURITY AND PURPOSE
The Certificates 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. The proceeds will be used to
finance the acquisition of various items of capital equipment.
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TYPE OF PROPOSALS
Proposals shall be for not less than $1,526,557 and accrued interest on the total principal amount
of the Certificates. 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 $15,350,
payable to the order of the City. If a check is used, it must accompany the proposal. If a
Financial Surety Bond is used, it must be from an insurance company licensed to issue such a
bond in the State of Minnesota, and preapproved by the City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Certificates are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award If such Deposit is not received by that time,
the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement The
Deposit received from the purchaser, the amount of which will be deducted at settlement and no
interest will accrue to the purchaser, will be deposited by the City. 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 Certificates is adjourned, recessed, or continued
to another date without award of the Certificates having been made. Rates shall be in integral
multiples of 5 /100 or 1/8 of 1 Rates must be in level or ascending order Certificates of the
same maturity shall bear a single rate from the date of the Certificates to the date of maturity. No
conditional proposals will be accepted.
AWARD
The Certificates 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 nght to (i) waive non substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Certificates, (n) reject all proposals
without cause, and (in) reject any proposal that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If the Certificates 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
Certificates. Any increased costs of issuance of the Certificates 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 Certificates from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
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Failure of the municipal bond insurer to issue the policy after Certificates have been awarded to
the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery
on the Certificates.
CUSIP NUMBERS
If the Certificates qualify for assignment of CUSIP numbers such numbers will be printed on the
Certificates, but neither the failure to print such numbers on any Certificate nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Certificates. 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 Certificates will be delivered without cost
to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by
the purchaser of an approving legal opinion of 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 Certificates shall be made in
federal, or equivalent, funds that shall be received at the offices of the City or its designee not
later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the
Certificates has been made impossible by action of the City, or its agents, the purchaser shall be
liable to the City for any loss suffered by the City by reason of the purchaser's non comphance
with said terms for payment.
CONTINUING DISCLOSURE
On the date of actual issuance and dehvery of the Certificates, the City will execute and deliver a
Continuing Disclosure Undertaking (the "Undertaking whereunder the City will covenant for
the benefit of the owners of the Certificates to provide certain financial and other information
about the City and notices of certain occurrences to information repositories 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 Certificates, and said Official Statement will serve as a nearly final Official
Statement within the meaning of Rule 15c2 -12 of the Secunties and Exchange Commission. For
copies of the Official Statement or for any additional information prior to sale, any prospective
purchaser is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson
Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, pnncipal amounts and interest rates of the Certificates, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Certificates, as that term is defined in Rule 15c2 -12. By awarding the Certificates to any
undenvnter 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
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senior managing underwriter of the syndicate to which the Certificates are awarded 60 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 Certificates 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 Certificates 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 Certificates
for purposes of assuring the receipt by each such Participating Underwriter of the Final Official
Statement.
Dated April 5, 2005 BY ORDER OF THE CITY COUNCIL
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/s/ Linda Jentink
City Clerk
MEMORANDUM
TO: Jeff May, City of Rosemount
FROM: Al Erickson
DATE: March 30, 2005
SUBJECT. Equipment Lease vs. Equipment Certificates
Springsted
Spnngsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101 -2887
Tel 651 223 -3000
Fax 651- 223 -3002
www sprrngsted.com
In 2001 the City entered Into a 10 year lease with Lease Finance Group in order to acquire
certain equipment. You currently have similar needs for about $850,000 of equipment and have
asked Springsted to Investigate the potential of another 10 year lease Your current lease has a
rate of approximately 5 -15 In researching the market we have discovered that a similar 10
year lease will likely have a rate around 5.5%
Based upon this information we have suggested that you consider utilizing Equipment
Certificates rather than a lease. In addition, we are also suggesting that you issue Certificates
in an amount large enough to finance your current needs and pay off the existing 2001 lease.
We have asked Mary Dyrseth to opine on this and she has agreed that it may be done.
The advantage to issuing the Certificate is that, in the current market, we would anticipate an
Interest rate of about 3.5% The disadvantage is that Minnesota Statutes limit the maturity of
the Certificates to a maximum of 5 years. Therefore, the questions are ones of total cost and
current cash flow.
If you continue to pay the existing lease until maturity (2011) there is a remaining total liability of
approximately $700,000 payable at the rate of about $116,000 per year An additional 10 year
lease for your current needs would cost you approximately $120,000 per year through 2015 for
a total liability of about $1,200,000 That equates to yearly payments of about $236,000 per
year through 2011 and $120,000 from 2012 through 2015 for a total outlay of approximately
$1,900,000. Based upon current market rates, the Certificates (wrapping in current needs and
the 2001 lease) are estimated to cost approximately $335,000 per year through 2010 for a total
obligation of about $1,680,000.
This analysis shows that by using Certificates you would need to pay approximately $100,000
more per year through 2010, however, you would pay approximately $220,000 less overall and
your obligation for these items would be fully discharged by the end of 2010. This is 5 years
earlier than under the lease scenario
Public Sector Au visors
City of Rosemount, Minnesota
March 30, 2005
Page 2
There appears to be a good business reason to utilize the Certificates in terms of total flow of
resources and final payment dates If the burden of the additional cash flow during the years
2006 through 2010 is acceptable to you it would seem appropriate to issue the Certificates.
Please let me know if you have any questions.
Presented to:
Study No.: R0704L5N5
SPRINGSTED Incorporated
March 31, 2005
Recommendations
For
City of Rosemount, Minnesota
$2,630,000
General Obligation Capital Improvement Plan Bonds, Series 2005A
$1,535,000
General Obligation Equipment Certificates of Indebtedness, Series 2005B
Honorable Bill Droste, Mayor
Members, City Council
Mr Jamie Verbrugge, City Administrator
Mr Jeffrey May, Finance Director
City of Rosemount
2875 145th Street West
Rosemount, MN 55068 -4941
0 Springsted
RECOMMENDATIONS
Re. Recommendations for the Issuance of:
$2,630,000 General Obligation Capital Improvement Plan Bonds Series 2005A (the "Bonds" or "Issue
$1,535,000 General Obligation Equipment Certificates of Indebtedness, Series 2005B
(the "Certificates" or "Issue
(collectively, the "Obligations' or "Issues
We respectfully request your consideration of our recommendations for the above -named Issues. Bond proceeds will
be used to finance the construction and equipping of a new fire station. Certificate proceeds will be used to finance
the acquisition of various items of capital equipment for City departments, including certain items previously subject to
a lease purchase agreement the City executed in 2001 (the "2001 Lease The 2001 Lease will be prepaid using a
portion of the Certificates proceeds.
We recommend the following for the Obligations:
1. Action Requested
2. Sale Date and Time
3. Method of Sale
4 Authority for the Obligations
5. Repayment Term
To establish the date and time of receiving bids and
establish the terms and conditions of the offenngs.
Tuesday, May 24, 2005 at 11 00 A.M., with
consideration for award by the City Council at
6:30 P M that same day.
The Obligations will be sold using a competitive
bidding process. In the interest of obtaining as many
bids as possible, we have included a provision in the
attached Terms of Proposal for underwriters to submit
their bid electronically through the electronic bidding
platform of PARITY® In addition, physical bids (by
phone or fax) will be accepted at the offices of
Springsted
The Obligations are being issued pursuant to
Minnesota Statutes, Chapter475
The Bonds are further authorized pursuant to
Minnesota Statutes, Section 475.5210.
The Certificates are further authorized pursuant to
Minnesota Statutes, Section 412.301.
The Bonds will mature annually February 1, 2007
through 2025. Interest will be payable semi- annually
each February 1 and August 1, commencing
February 1, 2006
City of Rosemount, Minnesota
March 31, 2005
6. Secunty and Payment Cycle
(a) Security
(b) Source of Payment
(c) First Payment Cycle
7 Prepayment Provisions
The Certificates will mature annually June 1, 2006
through 2010 Interest will be payable semi- annually
each June 1 and December 1, commencing December
1, 2005.
The Obligations will be general obligations of the City,
secured by its full faith and credit and taxing power
The Obligations will be repaid from ad valorem
property taxes
The Bonds The City will file its first levy for the Bonds
in 2005 for collection in 2006. Since the February 1,
2006 interest payment will come due prior to any tax
collections, that payment will be capitalized from Bond
proceeds Each years first -half collection of taxes will
be used to pay the interest payment due August 1 in
the year of collection Second -half collections of taxes
plus surplus first -half collections will be used to pay the
February 1 principal and interest payment due in the
following year.
The Certificates The City has levied roughly
$115,000 annually for payments on the existing 2001
Equipment Lease In 2004, the City levied for
payments due August 1, 2005 and February 1, 2006.
These funds will be sufficient to make the initial interest
payment due on the Certificates on December 1, 2005.
A portion of the funds levied in 2005 and collected in
2006 will be available to make the June 1, 2006
principal and interest payment, which is projected to be
$314,020 In subsequent years, each year's first -half
collection of taxes, together with an advance of
available City funds, will be used to pay the pnncipal
and interest payment due June 1 in the year of
collection Second -half collections of taxes will be
used to pay the December 1 interest payment due in
the same year, and reimburse the City for the advance
made for the June 1 payment.
The City may elect on February 1, 2016, and on any
date thereafter, to prepay the Bonds due on or after
February 1, 2017, at a pnce of par plus accrued
interest
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City of Rosemount, Minnesota
March 31, 2005
8 Credit Rating Comments
9. Term Bonds
10. Federal Treasury Regulations Concerning Tax
Exempt Obligations
(a) Bank Qualification
(b) Rebate Requirements
Due to their short duration, the Certificates will not be
subject to prepayment prior to their stated maturity
An application will be made to Moody's Investors
Service for a rating on the Obligations The City's
current general obligation credit rating is "Al
With respect to the Bonds, we have included a
provision that permits the underwriters to combine
multiple maturity years into a term bond, subject to
mandatory redemption on the same maturity schedule
provided in the Terms of Proposal. The advantage to
the underwriter is that it provides large blocks of
bonds, which are more attractive to bond funds, and
certain pension funds This in turn is a benefit to the
City since selling larger blocks of bonds reduces the
risk to the underwriter, allowing them to lower their
costs and the interest coupons Since the Bonds are
being offered on a competitive bid basis and awarded
on the lowest true interest cost, the City will award the
Bonds to the best bid regardless of whether term
bonds are chosen or not.
Due to their short duration, term bonds will not be
permitted for the Certificates.
Under Federal Tax Law, financial institutions cannot
deduct from income for federal income tax purposes,
expense that is allocable to carrying and acquiring tax
exempt bonds There is an exemption to this for "bank
qualified" bonds, which can be so designated if the
issuer does not issue more than $10 million of tax
exempt bonds in a calendar year Issues that are
bank qualified generally receive slightly lower interest
rates than issues that are not bank qualified. Since
the City expects to issue less than $10 million of tax
exempt obligations in 2005, the Obligations are
designated as bank qualified.
AU tax exempt issues are subject to the federal
arbitrage and rebate requirements, which require all
excess earnings created by the financing to be rebated
Page 3
City of Rosemount, Minnesota
March 31, 2005
(c) Bona Fide Debt Service Fund
(d) Economic Life
to the U S. Treasury. The requirements generally
cover two categones 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 financing is expected to meet
one of the spend down exemptions, in which case no
rebate of construction fund interest earnings will be
required 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. In any event, Bond
proceeds, if any not set aside for project expenditures
may still be subject to rebate
Springsted currently provides arbitrage rebate services
for the City under a separate contract An amendment
to that contract adding these Issues has been provided
to City staff.
The City must maintain a bona fide debt service fund
for the Obligations or be subject to yield restriction.
This requires restricting the investments held in the
debt service fund to the yield on the Obligations and /or
paying back excess investment earnings in the debt
service fund to the federal government. A bona fide
debt service fund is a fund for which there is an equal
matching of revenue to debt service expense, with
carry over permitted equal to the greater of the
investment earnings in the fund during that year or
1/12 the debt service of that year.
The average life of the Obligations cannot exceed
120% of the economic life of the projects to be
financed
The average life of the Bonds is 11.81 years, and the
useful life of the project to be financed is 40 -50 years
The average life of the Certificates is 3 02 years and
Page 4
City of Rosemount, Minnesota
March 31, 2005
(e) Federal Reimbursement Regulations
11. Continuing Disclosure
12. Attachments
the useful life of the equipment to be purchased is four
years. The Obligations are within the economic life
requirements.
Federal reimbursement regulations require the City to
make a declaration, within 60 days of the actual
payment, of its intent to reimburse itself from expenses
paid prior to the receipt of proceeds of the Bonds It is
our understanding the City has taken whatever actions
are necessary to comply with the federal
reimbursement regulations in regards to the
Obligations
The Obligations are subject to continuing disclosure
requirements set forth by the Securities and Exchange
Commission The SEC rules require the City to
undertake an annual update of certain Official
Statement information and report any material events
to the national repositories Springsted currently
provides continuing disclosure services for the City
under a separate contract An amendment to that
contract adding these Issues has been provided to City
staff.
The Bonds
Sources and Uses of Funds
Debt Service Schedule
The Certificates
Sources and Uses of Funds
Debt Service Schedule
Terms of Proposals
Page 5
City of Rosemount, Minnesota
March 31, 2005
The Bonds
DISCUSSION
The Bonds are being issued under statutory authority that allows Minnesota cities to issue capital improvement plan
"CIP') bonds, provided the maximum calendar year debt service payments on all outstanding CIP issues are less
than 0 05367% of the taxable market value of property in the City The City has no other CIP issues outstanding, and
the maximum calendar year debt service on the Bonds is projected to be $207,193. Calculation of the statutory
maximum debt service is shown below.
2004/5 Taxable Market Value Statutory Limit Statutory Limit
$1,606,616,700 05367% $862,271.18
Proceeds of the Bonds will be used to finance the construction and equipping of a new fire station in the City Page 8
shows the sources and uses of funds for the Bonds Proceeds of the Bonds will be used to cover all expenses
related to the sale of the Bonds, and to fund the interest payment due on February 1, 2006 This payment is
capitalized because ad valorem property taxes filed in 2005 will be collected after the February 1, 2006 payment, and
will be available to fully fund payments due on August 1, 2006 and thereafter.
Debt service has been structured to reflect level annual payments for the life of the Bonds The average annual debt
service projected for the Bonds is $206,880. Page 9 shows the projected debt service requirements for the Bonds:
Columns 1 through 3 show the annual pnncipal payments, estimated interest rates and projected interest
payments, given the current market environment.
Column 4 shows the total debt service paid to bondholders over the life of the Bonds
Column 5 shows the interest payment due on February 1, 2006. This payment will be capitalized, meaning that it
will be paid from proceeds of the Bonds.
Column 6 shows the debt service to be paid from ad valorem taxes over the life of the Bonds. Because the
interest payment due on February 1, 2006 is capitalized, it is not included in this column.
Column 7 shows the required 105% ovedevy mandated by State statute, which is in place to protect the City and
bondholders in the event of delinquencies in collection of taxes for the repayment of the Bonds
The Certificates
The proceeds of the Certificates will be used to finance the acquisition of various items of rolling stock for the Public
Works and Fire Departments, and to prepay an equipment lease which the City entered in 2001 for an electric ice
resurfacer, three trucks, and two graders The sources and uses for the Certificates are shown on page 10
Page 6
City of Rosemount, Minnesota
March 31, 2005
Minnesota Statutes, Section 412.301, specifies that the City may issue certificates of indebtedness without being
subject to a petition requirement calling for a referendum if the total amount of the issue does not exceed Y of the 1%
of the estimated market value of the taxable property in the City Based on the City's 2004/2005 taxable market value
of $1,606,616.700, this represents a maximum issue size of $4,016,541. This Issue of $1,535,000 is within the
limitation and is not subject to taxpayer petition for a referendum.
The Certificates will be general obligations of the City, secured by its full faith and credit and taxing power, and will be
repaid with ad valorem property taxes. Each year's first -half collection of taxes will be used to pay most of the
pnncipal and interest payment due June 1 in the year of collection City funds are likely to be required to fund the
remainder of each year's June 1 payment, and the City anticipates reimbursing these funds from levied funds
collected in the second half of the year Second -half collections of taxes will be used to pay the December 1 interest
payment due in the same calendar year
The debt service schedule for the Certificates is shown on page 11. Principal repayment has been structured with
even total annual payments of principal and interest
Spnngsted is pleased to again be of service to the City of Rosemount.
Respectfully submitted,
SPRINGSTED Incorporated
kem
Provided to Staff Rebate and Continuing Disclosure Contract Amendments
Page 7
Springsted
$2,630,000
City of Rosemount, Minnesota
General Obligation Capital Improvement Plan Bonds, Series 2005A
(Fire Station)
Dated 06/15/2005 i Delivered 06/15/2005
Uses Of Funds
Available for Project Costs
Deposit to Capitalized Interest (CIF) Fund
Total Underwriter's Discount (1 300
Costs of Issuance
Sources Uses
fit RaVMo- rST mne, 2005A cIrRands n ,rnw.ccrx xms 1 .7/21/20011 ICI-41 AM
Preliminary
Sources Of Funds
Par Amount of Bonds $2,630,000 00
Total Sources $2,630,000.00
2,498,131 35
68,978 65
34,190 00
28,700 00
Total Uses $2,630,000.00
Page 8
Dated
Delivery Date
First Coupon Date
Yield Statistics
Bond Year Dollars
Average Life
Average Coupon
IRS Form 8038
Net Interest Cost
Weighted Average Matunty
$2,630,000
City of Rosemount, Minnesota
General Obligation Capital Improvement Plan Bonds, Series 2005A
(Fire Station)
Net Interest Cost (NIC)
True Interest Cost (TIC)
Bond Yield for Arbitrage Purposes
All Inclusive Cost (AIC)
Debt Service Schedule
File Ra t44o -1 sl' Ames 200:N [fl'Rud, /1 .VM%LCRIRM,L /,4/2.'1/300,4 1 16.51 AM
Springsted
Preliminary
(1)
Date Principal Coupon Interest Total P +I Cap Interest Net New WS 105% of Total
02/01/2006 68,978 65 68,978 65 (68,978 65)
02/01/2007 95,00000 2 950% 109,87750 204,87750 204,87750 215,121 38
02/01/2008 100,000 00 3 150% 107,075 00 207,075 00 207,075 00 217,428 75
02/01/2009 105,000 00 3 300% 103,925 00 208,925 00 208,925 00 219,371 25
02/01/201D 105,000 OD 3 450% 100,460 00 205,460 00 205,460 00 215,733 00
02/01/2011 110,000 00 3 600% 96,837 50 206,837 50 206,837 50 217,179 38
02/01/2012 115,000 00 3 750% 92,877 50 207,877 50 207,877 50 218,271 38
02/D1/2013 120,000 00 3 900% 88,565 00 208,565 00 208,565 00 218,993 25
02/01/2014 125,000 00 4 000% 83,885 00 208,885 00 208,885 00 219 329 25
02/01/2015 130,000 00 4 100% 78,885 00 208,885 00 208,885 00 219,329 25
02/01/2016 135,000 00 4 200% 73,555 00 208,555 00 208,555 00 218,982 75
02/01/2017 140,000 00 4 300% 67,885 00 207,885 00 207,885 00 218,279.25
02/01/2018 145,000 00 4 350% 61,865 00 206,865 00 206,865 00 217,208 25
02/01/2019 150,000 00 4 450% 55,557 50 205,557 50 205,557 50 215,835 38
02/01/2020 155,000 00 4 450% 48,882 50 203,882 50 203,882 50 214,076 63
02/01/2021 165,000 00 4 550% 41,985 00 206,985 00 206,985 00 217,334 25
02/01/2022 170,000.00 4 600% 34,477 50 204,477 50 204,477 50 214,701.38
02/01/2023 180,000 00 4 650% 26,657 50 206,657 50 206,657 50 216,990 38
02/01/2024 190,000 00 4 750% 18,287.50 208,287 50 208,287 50 218,701 88
02/01/2025 195,000 00 4 750% 9,262 50 204,262 50 204,262 50 214,475 63
Total $2,630,000 00 $1,369,781 15 $3,999,781 15 (68,978 65) $3,930,802 50 $4,127,342 63
6/15/2005
6/15/2005
2/01/2006
$31,061.06
11 810 Years
4,4099633%
4 5200368%
4,5249297%
4.3761903%
4 6519687%
4 4099633%
11 810 Years
Page 9
Dated 06/15/2005 J Delivered 06/15/2005
Sources Of Funds
Par Amount of Bonds
$1,535,000
City of Rosemount, Minnesota
General Obligation Equipment Certificates
Series 2005B
Sources Uses
Me RairM0-1 SF net 200511Lquipment Ce .VNGL517/graq 5/80/200.1 918 AM
Preliminary
$1,535,000 00
Total Sources $1,535,000 00
Uses Of Funds
Fire and Public Works Funds 848,000.00
Prepayment of 2001 Lease 653,775 60
Costs of Issuance 23,95000
Total Underwnter's Discount (0 550%) 8,442,50
Rounding Amount 831 90
Total Uses $1,535,000 00
Springsted Page 10
SIGNIFICANT DATES
Dated
Delivery Date
First Coupon Date
Yield Statistics
Bond Year Dollars,
Average Life
Average Coupon
Net Interest Cost (NIC)
True Interest Cost (TIC)
Bond Yield for Arbitrage Purposes
All Inclusive Cost (AIC)
IRS Form 8038
Net Interest Cost
Weighted Average Matunty
Interest rates are estimates. Changes in rates may
cause significant alterations to this schedule.
The actual underwriter's discount bid may also vary.
Springsted
$1,535,000
City of Rosemount, Minnesota
General Obligation Equipment Certificates
Series 2005B
Debt Service Schedule
Preliminary
Date Principal Coupon Interest Total P +I 105% Levy
06/01/2006 290,00000 2 750% 46,171 78 336,171 78 352,98037
06/01/2007 300,000 00 2 950% 40,065 00 340,065 00 357,068 25
06/01/2008 305,000 00 3 150% 31,215 00 336,215 DD 353,025 75
06/01/2009 315,000 00 3 300% 21,607 50 336,607 50 353,437 88
06/01/2010 325,000 00 3 450% 11,212 50 336,212 50 353,023 13
Total $1,535,000 00
$150,271 78
$1,685,271 78 $1,769,535 37
Me RU%RMO .w Meer 200iRLqu,pmen c .NJGLCRMRFth7 .v /,40 /200'/ *21( M}
6/15/2005
6/15/2005
12/01/2005
$4,630 31
3 016 Years
3.2453966%
3.4277280%
3 4370545%
3 2416654%
3 9998053%
3 2453966%
3,016 Years
Page 11
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$2,630,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS,
SERIES 2005A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 24, 2005, until 11:00 A.M Central
Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P M Central Time, of the same day.
Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the
time of sale specified above All bidders are advised that each Proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Bonds regardless of the
manner in which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax
(651) 223 -3046 to Springsted Signed Proposals, without final price or coupons, may be
submitted to Springsted prior to the time of sale The bidder shall be responsible for submitting
to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax
(651) 223 -3046 for inclusion in the submitted Proposal
OR
SUBMISSION OF PROPOSALS
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARITY'. For purposes of the electronic bidding process, the time as maintained by PARITY
shall constitute the official time with respect to all Bids submitted to PARITY Each bidder shall
be solely responsible for making necessary arrangements to access PARITY for purposes of
submitting its electronic Bid in a timely manner and in compliance with the requirements of the
Terms of Proposal. Neither the City, its agents nor PARITY' shall have any duty or obligation to
undertake registration to bid for any prospective bidder or to provide or ensure electronic access
to any qualified prospective bidder, and neither the City, its agents nor PARITY shall be
responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or
have any liability for any delays or interruptions of or any damages caused by the services of
PARITY' The City is using the services of PARITY solely as a communication mechanism to
conduct the electronic bidding for the Bonds, and PARITY is not an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARITY this
Terms of Proposal shall control. Further information about PARITY including any fee charged,
may be obtained from:
PARITY 1359 Broadway, 2 Floor, New York, New York 10018
Customer Support (212) 849 -5000
DETAILS OF THE BONDS
Page 12
The Bonds will be dated June 15, 2005, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2006. 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
2007 95,000
2008 $100,000
2009 $105,000
2010 $105,000
2011 $110,000
2012 $115,000
2013 $120,000
2014 $125,000
2015 $130,000
2016 $135,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds All term bonds shall be subject to mandatory sinking fund redemption
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 "Years
of Term Maturities" in the spaces provided on the Proposal Form
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public The Bonds will be issued in fully registered form and one Bond,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede Co as nominee of The Depository Trust Company "DTC
New York, New York, which will act as securities depository of the Bonds. Individual purchases
of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single
maturity through book entries made on the books and records of DTC and its participants.
Principal and interest are payable by the registrar to DTC or its nominee as registered owner of
the Bonds Transfer of principal and interest payments to participants of DTC will be the
responsibility of DTC, transfer of principal and interest payments to beneficial owners by
participants will be the responsibility of such participants and other nominees of beneficial
owners The purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
2017 $140,000
2018 $145,000
2019 $150,000
2020 5155,000
2021 $165,000
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, 2016, and on any day thereafter, to prepay Bonds due on or
after February 1, 2017 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
2022 $170,000
2023 $180,000
2024 $190,000
2025 $195,000
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 The proceeds will be used to finance
the construction of a fire station in the City
Page 13
TYPE OF PROPOSALS
Proposals shall be for not less than $2,595,810 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 $26,300,
payable to the order of the City If a check is used, it must accompany the proposal If a
Financial Surety Bond is used, it must be from an insurance company licensed to issue such a
bond in the State of Minnesota, and preapproved by the City Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3 30 P M Central
Time, on the next business day following the award If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement
The Deposit received from the purchaser, the amount of which will be deducted at settlement
and no interest will accrue to the purchaser, will be deposited by the City In the event the
purchaser fails to comply with the accepted proposal, said amount will be retained by the City.
No proposal can be withdrawn or amended after the time set for receiving proposals unless the
meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to
another date without award of the Bonds having been made Rates shall be in integral multiples
of 5 /100 or 1/8 of 1% Rates must be in level or ascending order Bonds of the same maturity
shall bear a single rate from the date of the Bonds to the date of maturity. No conditional
proposals will be accepted.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling
The City will reserve the right to (i) waive non substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and (iii) reject any proposal that the City determines to have failed to comply with
the terms herein
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwater, 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
Page 14
Bonds The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers
shall be paid by the purchaser
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser through DTC in New York, New York Delivery will be subject to receipt by the
purchaser of an approving legal opinion of 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 that shall be received at the offices of the City or its designee not later than
12.00 Noon, Central Time Unless compliance with the terms of payment for the Bonds has
been made impossible by action of the City, or its agents, the purchaser shall be liable to the
City for any loss suffered by the City by reason of the purchaser's non compliance with said
terms for payment.
CONTINUING DISCLOSURE
On the date of actual issuance and delivery of the Bonds, the City will execute and deliver a
Continuing Disclosure Undertaking (the "Undertaking whereunder the City will covenant for the
benefit of the owners of the Bonds to provide certain financial and other information about the
City and notices of certain occurrences to information repositories 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, 380 Jackson Street,
Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2 -12 By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 100 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 April 5, 2005 BY ORDER OF THE CITY COUNCIL
is/ Linda Jentink
City Clerk
Page 15
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
OR
TERMS OF PROPOSAL
$1,535,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION EQUIPMENT CERTIFICATES
OF INDEBTEDNESS, SERIES 2005B
(BOOK ENTRY ONLY)
Proposals for the Certificates will be received on Tuesday, May 24, 2005, until 11:00 A.M
Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint
Paul, Minnesota, after which time they will be opened and tabulated Consideration for award of
the Certificates will be by the City Council at 6 30 P M Central Time, of the same day
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the
time of sale specified above. All bidders are advised that each Proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Certificates regardless of
the manner in which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax
(651) 223 -3046 to Springsted Signed Proposals, without final price or coupons, may be
submitted to Springsted prior to the time of sale The bidder shall be responsible for submitting
to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax
(651) 223 -3046 for inclusion in the submitted Proposal.
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARITY For purposes of the electronic bidding process, the time as maintained by PARITY
shall constitute the official time with respect to all Bids submitted to PARITY Each bidder shall
be solely responsible for making necessary arrangements to access PARITY for purposes of
submitting its electronic Bid in a timely manner and in compliance with the requirements of the
Terms of Proposal Neither the City, its agents nor PARITY shall have any duty or obligation to
undertake registration to bid for any prospective bidder or to provide or ensure electronic access
to any qualified prospective bidder, and neither the City, its agents nor PARITY shall be
responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or
have any liability for any delays or interruptions of or any damages caused by the services of
PARITY The City is using the services of PARITY solely as a communication mechanism to
conduct the electronic bidding for the Certificates, and PARITY is not an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARITY this
Terms of Proposal shall control. Further information about PARITY including any fee charged,
may be obtained from
PARITY 1359 Broadway, 2 Floor, New York, New York 10018
Customer Support (212) 849 -5000
Page 16
2006 $290,000 2008 $305,000
2007 $300,000
DETAILS OF THE CERTIFICATES
The Certificates will be dated June 15, 2005, as the date of original issue, and will bear interest
payable on June 1 and December 1 of each year, commencing December 1, 2005 Interest will
be computed on the basis of a 360 -day year of twelve 30 -day months.
The Certificates will mature June 1 in the years and amounts as follows:
BOOK ENTRY SYSTEM
2009 $315,000 2010 $325,000
The Certificates will be issued by means of a book entry system with no physical distribution of
Certificates made to the public. The Certificates will be issued in fully registered form and one
Certificate, representing the aggregate principal amount of the Certificates 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
Certificates Individual purchases of the Certificates 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 Certificates. 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 Certificates, will be required to deposit the Certificates 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 Certificates will not be subject to payment in advance of their respective stated maturity
dates
SECURITY AND PURPOSE
The Certificates 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 The proceeds will be used to
finance the acquisition of various items of capital equipment
TYPE OF PROPOSALS
Proposals shall be for not less than $1,526,557 and accrued interest on the total principal
amount of the Certificates. 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 $15,350, payable to the order of the City If a check is used, it must accompany the proposal.
If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such
a bond in the State of Minnesota, and preapproved by the City. Such bond must be submitted
to Springsted Incorporated prior to the opening of the proposals The Financial Surety Bond
must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond If
the Certificates 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
Page 17
3'30 P.M Central Time, on the next business day following the award If such Deposit is not
received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit
requirement The Deposit received from the purchaser, the amount of which will be deducted at
settlement and no interest will accrue to the purchaser, will be deposited by the City 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 Certificates is adjourned, recessed, or
continued to another date without award of the Certificates having been made Rates shall be
in integral multiples of 5/100 or 1/8 of 1% Rates must be in level or ascending order.
Certificates of the same maturity shall bear a single rate from the date of the Certificates to the
date of maturity No conditional proposals will be accepted
AWARD
The Certificates 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 Certificates, (n) reject all proposals
without cause, and (iii) reject any proposal that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If the Certificates 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 Certificates. Any increased costs of issuance of the Certificates 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 Certificates 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 Certificates have been awarded to
the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery
on the Certificates
CUSIP NUMBERS
If the Certificates qualify for assignment of CUSIP numbers such numbers will be printed on the
Certificates, but neither the failure to print such numbers on any Certificate nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Certificates 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 Certificates will be delivered without cost to
the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the
purchaser of an approving legal opinion of 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 Certificates shall be made in
federal, or equivalent, funds that shall be received at the offices of the City or its designee not
later than 12.00 Noon, Central Time, Unless compliance with the terms of payment for the
Certificates has been made impossible by action of the City, or its agents, the purchaser shall
Page 18
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 actual issuance and delivery of the Certificates, the City will execute and deliver
a Continuing Disclosure Undertaking (the "Undertaking whereunder the City will covenant for
the benefit of the owners of the Certificates to provide certain financial and other information
about the City and notices of certain occurrences to information repositories 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 Certificates, 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, Sprrngsted Incorporated,
380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Certificates, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Certificates, as that term is defined in Rule 15c2 -12 By awarding the Certificates 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 Certificates are awarded 60 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 Certificates 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 Certificates 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 Certificates for
purposes of assuring the receipt by each such Participating Underwriter of the Final Official
Statement
Dated April 5, 2005 BY ORDER OF THE CITY COUNCIL
/s/ Linda Jentink
City Clerk
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