HomeMy WebLinkAbout6.j. 2003A G.O. Improvement Bond Issue - Authorizing Issuance and Setting Bond SaleCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: June 3, 2003
AGENDA ITEM: 2003A G.O. Improvement Bond Issue -
Authorizing Issuance and Setting Bond Sale
AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director
AGEND
ATTACHMENTS: Resolution and Recommendations
APPROVED BY: Z^--"
This item is on the agenda for your consideration in authorizing the issuance and setting the sale of
General Obligation Improvement Bonds for the Connemara Trail Phase 2 Improvements - Project
#343A.
Bids will be opened Tuesday, July 1, 2003, at 10:00 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 7:30 P.M., Central Time, of the same day.
RECOMMENDED ACTION:
Motion to adopt a RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF
$1,945,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2003A.
COUNCIL ACTION:
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $1,945,000 GENERAL OBLIGATION IMPROVEMENT BONDS,
SERIES 2003A
WHEREAS, the City Council of the City of Rosemount, Minnesota, has heretofore determined
that it is necessary and expedient to issue its $1,945,000 General Obligation Improvement
Bonds, Series 2003A (the 'Bonds ") to finance various improvements within the City; 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 in accordance with Minnesota Statutes, Section
475.60, Subdivision 2(9); and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount,
Minnesota, as follows:
1. Authorization; Findings The City Council hereby authorizes Springsted to solicit bids
for the competitive negotiated sale of the Bonds.
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 Bonds. The Administrator, or his designee, shall open bids at
the time and place specified in such Terms of Proposal.
3. Terms of Proposal The terms and conditions of the Bonds and the negotiation thereof
are fully set forth in 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 Bonds, and to execute and deliver it on behalf of the City upon its completion.
1532606v1
RESOLUTION 2003-
ADOPTED this 3rd day of June, 2003.
William H. Droste, Mayor
ATTEST:
Linda J. Jentink, City Clerk
Motion by:
Voted in favor:
Voted Against:
Members Absent:
Seconded by:
1532606vl 2
RESOLUTION 2003-
STATE OF MINNESOTA
COUNTY OF DAKOTA
CITY OF ROSEMOUNT
I, the undersigned, being the duly qualified and acting Clerk of the City of Rosemount,
Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of
minutes with the original thereof on file in my office, and that the same is a full, true and
complete transcript of the minutes of a meeting of the City Council of said City, duly called and
held on the date therein indicated, insofar as such minutes relate to the City's $1,945,000 General
Obligation Improvement Bonds, Series 2003A.
WITNESS my hand this day of , 2003.
Clerk
1532606v1 3
RESOLUTION 2003-
EXHIBIT A
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE
THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE
FOLLOWING BASIS:
TERMS OF PROPOSAL
$1,945,000
City of Rosemount, Minnesota
General Obligation Improvement Bonds, Series 2003A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, July 1, 2003, until 10:00 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 7:30 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 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.
./'
(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 PARITYO solely as a
communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is
not an agent of the City.
1532606vl
RESOLUTION 2003-
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®, 40 West 23rd Street, 5th Floor, New York City, New York 10010,
Customer Support, (212) 404 -8102.
DETAILS OF THE BONDS
The Bonds will be dated July 1, 2003, as the date of original issue, and will bear interest payable
on February 1 and August 1 of each year, commencing February 1, 2004. 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:
2005 $210,000 2009 $190,000 2012 $190,000
2006 $195,000 2010 $190,000 2013 $195,000
2007 $195,000 2011 $190,000 2014 $195,000
2008 $195,000
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
The City will name the registrar that shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
1532606v1 A -2
RESOLUTION 2003-
OPTIONAL REDEMPTION
The City may elect on February 1, 2011, and on any day thereafter, to prepay Bonds due on or
after February 1, 2012. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge special
assessments from benefited properties. The proceeds will be used to finance various
improvements within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $1,925,550 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 $19,450, 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 1100 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.
The Bonds will be awarded on the basis of the lowest interest rate to be detennined 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.
1532606v1 A -3
I
RESOLUTION 2003-
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 underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of the
Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance
shall be paid by the purchaser, except that, if the City has requested and received a rating on the
Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall
be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect
thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the
Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers
shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser 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).
15326060 A -4
If
RESOLUTION 2003- %
OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent information
relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement
within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission. For copies of
the Official Statement or for any additional information prior to sale, any prospective purchaser
is referred to the Financial Advisor to the City, Springsted Incorporated, 85 East Seventh Place,
Suite 100, Saint Paul, Minnesota 55101, telephone (651) 223 3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any underwriter
or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than
seven business days after the date of such award, it shall provide without cost to the senior
managing underwriter of the syndicate to which the Bonds are awarded 80 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 (1) it shall accept such designation and (ii) it shall enter into a contractual
relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt
by each such Participating Underwriter of the Final Official Statement.
Dated June 3, 2003
BY ORDER OF THE CITY COUNCIL
/s/ Linda Jentirlk
City Clerk
1532606v1 A -5
Recommendations
For
City of Rosemount, Minnesota
$1,945,000
General Obligation Improvement Bonds, Series 2003A
$1,170,000
General Obligation Water Revenue Bonds, Series 2003B
Presented to:
Mayor Bill Droste
Members, City Council
Mr. Jamie Verbrugge, City Administrator
Mr. Jeffrey May, Finance Director
City of Rosemount
2875-145 th Street West
Rosemount, Minnesota 55068
Study No.: R0704G51-115
SPRINGSTED Incorporated
May 28, 2003
SPRINGSTED
Advisors to the Public Sector
RECOMMENDATIONS
Re: Recommendations for the Issuance of:
$1,945,000 General Obligation Improvement Bonds, Series 2003A
(the "Improvement Bonds ")
$1,170,000 General Obligation Water Revenue Bonds, Series 2003B
(the "Revenue Bonds ")
(Collectively the "Bonds" or the "Issues ")
We recommend the following for the Bonds:
1.
2.
3
4.
Action Requested
To establish the date and time of receiving bids
and establish the terms and conditions of the
offerings.
Sale Date and Time
Tuesday, July 1, 2003 at 10:00 A. M., with
award by the City Council at 7:30 P.M. that
same day.
Method of Sale
The Bonds will be sold through 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 O . In addition, physical bids (by phone
or fax) will be accepted at the offices of
Springsted.
Authority for the Bond Issues
The Improvement Bonds are being issued
pursuant to Minnesota Statutes, Chapters 475
and 429.
The Revenue Bonds are being issued pursuant
to Minnesota Statutes, Chapters 475 and 444.
5.
C:
7.
Principal Amount of Offerings Improvement Bonds - $1,945,000
Revenue Bonds - $1,170,000
Repayment Terms The Bonds will mature annually
February 1, 2005 through 2014. Interest will be
payable semi - annually each February 1 and -
August 1, commencing February 1, 2004.
Sources of Payment The Improvement Bonds are expected to be
repaid from special assessments against
benefited property. Special assessments will
be filed in October, 2003, for first collection in
2004. The City will also pledge net revenues
from the City's storm core utility to pay any
debt service that special assessments do not
cover. It is not expected that the City will levy
taxes for repayment of the Improvement
Bonds.
City of Rosemount, Minnesota
May 28, 2003
The Revenue Bonds are expected to be paid
from net revenues of the City's water utility. It
is not expected that the City will levy taxes for
repayment of the Revenue Bonds.
8. Prepayment Provisions The City may elect on February 1, 2011, and
on any date thereafter, to prepay the Bonds
due on or after February 1, 2012, at a price of
par plus accrued interest.
9. Credit Rating Comments An application will be made to Moody's
Investors Service for a rating on the Bonds.
The City's current credit rating on its general
obligation debt is "Al."
10. Federal Treasury Regulations Concerning
Tax- Exempt Obligations
(a) Bank Qualification 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 typically receive slightly
lower interest rates than issues that are not
bank- qualified. It is our understanding the City
expects to issue less than $10 million of tax -
exempt obligations in 2003, therefore these
Issues are designated as bank - qualified.
(b) Rebate Requirements
All tax - exempt issues are subject to the federal
arbitrage and rebate requirements, which
require all excess earnings created by the
financing to be rebated to the U.S. Treasury.
The requirements generally cover two
categories: bond proceeds and debt service
funds. There are exemptions from rebate in
both of these categories.
Bond proceeds, defined generally as both the
original principal of the issue and the
investment earnings on the principal, have 6,
18 and 24 -month spend down exemption
periods. If all of the proceeds are expended
during one of those exemption periods, the
proceeds are exempt from rebate and the City
may retain the excess earnings. If the City
does not expect to meet those requirements,
the reinvestment of bond proceeds must be
monitored and the City must rebate any
amount earned in excess of the rate of the
bonds. Springsted currently provides rebate
Page 2
City of Rosemount, Minnesota
May 28, 2003
11
(c) Bona Fide Debt Service Fund
calculation services to the City. An
amendment for these Issues has been
provided to City staff.
The City must maintain a bona fide debt
service fund for all series of Bonds or be
subject to yield restriction. This requires
restricting the investments held in the debt
service funds to the applicable Bond yields
and /or paying back excess investment
earnings in the debt service fund(s) 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.
With the Improvement Bonds additional
diligence should be exercised in monitoring the
debt service fund due to the potential
accumulation of assessment prepayments,
which could cause the fund to become non -
bona fide.
(d) Economic Life The average life of each series of Bonds
cannot exceed 120% of the economic life of
the projects to be financed. The economic life
of street improvements is 20 years and the
economic life of utility system improvements is
50 years. The average life of the Improvement
Bonds is 6.04 years. The average life of the
Revenue Bonds is 6.32 years. Each of the
Issues is therefore within the economic life
requirements.
(e) Federal Reimbursement
Regulations
Federal reimbursement regulations require the
City to make a declaration, within 60 days of
the actual payment, of its intent to reimburse
itself from expenses paid prior to the receipt of
Bond proceeds. It is our understanding that
the City has taken whatever actions are
necessary to comply with the federal
reimbursement regulations in regards to the
Bonds.
Continuing Disclosure Each series of Bonds is 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
Page 3
City of Rosemount, Minnesota
May 28, 2003
to that contract adding these Issues has been
provided to City staff.
12. Attachments
• Sources and Uses Schedule —
Improvement Bonds
• Assessment Income - Improvement Bonds
• Debt Schedule — Improvement Bonds
• Sources and Uses Schedule — Revenue
Bonds
• Debt Service Schedule — Revenue Bonds
• Terms of Proposals
DISCUSSION
$1,945,000 General Obligation Improvement Bonds, Series 2003A
(the "Improvement Bonds ")
The Improvement Bonds are being issued to finance street and utility construction for the
Connemara Phase II project. The sources and uses schedule on page 6 shows the
composition of the Improvement Bonds. The City will use cash contributions from the following
to reduce the borrowing amount.
Developer
Storm core
Fund
MSA
Total
$270,100
$319,072
$889,888
$1,478,960
As part of the financing, the City will file assessments in October 2003 over ten years with even
principal payments. Interest charged on the outstanding balance of the assessments will be 2%
over the bond rate. Page 7 shows the projected income produced by the assessments. The
City will also pledge net revenues from the storm core utility. Any portion of debt service not
paid by special assessments will be paid from storm core net revenues.
Our recommended principal repayment structure for the Improvement Bonds is shown on page
8. Debt service has been structured .around the anticipated assessment income receipts
developed on page 7 to result in an even annual levy requirement. Page 8 contains the
following information:
• Columns 1 through 4 show the annual principal, estimated interest rates and projected total
principal and interest payments, given the current market environment.
• Columns 5 and 6 show the capitalized interest and net debt service requirements.
• Column 7 shows the 5% overlevy which is required by State statutes and serves as a
protection to bondholders and the City in the event of delinquencies in the collection of
assessments or taxes.
• Column 8 shows the total projected assessment income developed on page 7.
• Column 9 shows the revenues required from the storm core utility, which represents the
difference between the projected assessment income and 105% of debt service.
Because the February 1, 2004 interest payment will come due prior to receipt of assessment
income, the Bonds have been sized to include capitalized interest sufficient to make that
payment. Thereafter, special assessments received each year plus storm core net revenues
Page 4
City of Rosemount, Minnesota
May 28, 2003
are expected to cover the August 1 interest payment due in the collection year and the
subsequent February 1 principal and interest payment.
$1,170,000 General Obligation Water Revenue Bonds, Series 2003B
(the "Revenue Bonds ")
Proceeds of the Revenue Bonds will be used to finance improvements and construction related
to the Eastside Water Main phase II project. The sizing of the Revenue Bonds including a
$100,000 contribution from the Dakota County Technical College is provided on the sources
and uses schedule on page 9. Page 10 illustrates the recommended structure and debt service
schedule for the Revenue Bonds. The Revenue Bonds have been structured around existing
water revenue debt, over ten years in even annual payments of principal and interest.
The Revenue Bonds will be repaid from net revenues of the City's water utility. Pursuant to
Minnesota Statues, Chapter 444 and the resolution awarding the Revenue Bonds, the City will
covenant to maintain rates in an amount sufficient to generate revenues to support the
operation of the water utility and to pay debt service. The City is required to annually review the
budget of the water utility to determine whether current rates and charges are sufficient and to
adjust them as necessary.
The City has four outstanding bond issues for which the net revenues of the water utility are
also pledged. Two of the four outstanding issues supported by the water utility (the 1996C and
1993C bonds) have a final maturity in 2005. The average projected total debt service payable
from net water utility revenues, after the 1996C and 1993C bonds are paid off, is projected to
be $310,000. The table below shows the 2002 net revenues available for debt service including
connection fees and special assessments for the City's water utility.
2002 Net Revenues Water Utility
Operating Revenues $ 925,159
Less: Operating Expenses (111,677)
Add: Investment Earnings 128,610
Connection Fees 1,209,435
Special Assessments 32.347
Net Revenues Available for Debt Service $2,183,874
Springsted is again pleased to be of service to the City of Rosemount.
Respectfully submitted,
SPRINGSTED Incorporated
kem
Provided to Staff: a) Amendment to Continuing Disclosure Contract
b) Amendment to Arbitrage /Rebate Contract
Page 5
City of Rosemount, Minnesota
$1,945,000
G.O. Improvement Bonds, Series 2003A
SOURCES & USES
I Dated 07/01/2003 Delivered 07/01/2003 1
SOURCES OF FUNDS
Par Amount of Bonds ............................................... ............................... $1,945,000.00
MSA Contribution ................................ ............................... ..................... 889,888.00
WaterCore ............................................................... ............................... 319,072.00
Developer Contribution ............................................. ............................... 270,000.00
TOTALSOURCES .................................................. ............................... $3,423,960.00
USES OF FUNDS
Primary Purpose Fund ............................................. ............................... 2,608,923.00
Engineering & Administration ................................... ............................... 740,452.00
Deposit to Capitalized Interest (CIF) Fund ............... ............................... 33,142.08
Costs of Issuance .............................. ............................... ...................... 22,175.00
Total Underwriters Discount (1. 000%) ..................... ............................... 19,450.00
Rounding Amount ..................................................... ............................... 1,817.92
TOTALUSES ...... .................................................................................... $3,423,960.00
Springsted Incorporated File = ROSEMO— I.SF -G.O. Improvement Bonds, Series 2003A- SINGLE PURPOSE
Advisors to the Pub#c Sector 511912003 3:19 PM
Page 6
SIGNIFICANT DATES
FilingDate ......................................................................................................... ............................... 10/01/2003
First Payment Date ........................................................................................... ............................... 12101/2004
Springsted Incorporated File = ROSEMO— I.SF -2003A Assessments - Special Assessments
Advisors to the Public Sector 51812003 12:40 PM
Page 7
City of Rosemount, Minnesota
$1,183,788
2003A Assessments
Special Assessments
ASSESSMENT INCOME
Date
Principal
Coupon
Interest
Total P +I
12/01/2003
-
-
-
-
12/01/2004
118,378.80
5.500%
75,959.73
194,338.53
12101/2005
118,378.80
5.500%
58,597.50
176,976.30
12/01/2006
118,378.80
5.500%
52,086.68
170,465.48
12/01/2007
118,378.80
5.500%
45,575.84
163,954.64
12/01/2008
118,378.80
5.500%
39,065.00
157,443.80
12/01 /2009
118,378.80
5.500%
32,554.18
150,932.98
12101/2010
118,378.80
5.500%
26,043.34
144,422.14
12101/2011
118,378.80
5.500%
19,532.50
137,911.30
12101/2012
118,378.80
5.500%
13,021.66
131,400.46
12/01/2013
118,378.80
5.500%
6,510.84
124,889.64
Total
1,183,788.00
-
368,947.27
1,552,735.27
SIGNIFICANT DATES
FilingDate ......................................................................................................... ............................... 10/01/2003
First Payment Date ........................................................................................... ............................... 12101/2004
Springsted Incorporated File = ROSEMO— I.SF -2003A Assessments - Special Assessments
Advisors to the Public Sector 51812003 12:40 PM
Page 7
Dated........................................................................................................................ ............................... 7/01/2003
DeliveryDate ............................................................................................................. ............................... 7/01/2003
FirstCoupon Date ..................................................................................................... ............................... 2/01 /2004
YIELD STATISTICS
BondYear Dollars ..................................................................................................... ............................... $11,744.58
AverageLife .............................................................................................................. ............................... 6.038 Years
AverageCoupon ....................................................................................................... ............................... 3.2523681%
NetInterest Cost ( NIC) ............................................................................................. ............................... 3.4179763%
TrueInterest Cost ( TIC) ........................................................................................... ............................... 3.4181255%
Bond Yield for Arbitrage Purposes ............................................................................ ............................... 3.2306466%
AllInclusive Cost ( AIC) ............................................................................................. ............................... 3.6350829%
IRS FORM 8038
NetInterest Cost ....................................................................................................... ............................... 3.2523681%
WeightedAverage Maturity ....................................................................................... ............................... 6.038 Years
Springsted Incorporated He = ROSEMO- I.SF -G.O. Improvement Bonds, Series 2003A- SINGLE PURPOSE
Advisors to the Public Sector 51192003 3:19 PM
Page 8
City of Rosemount, Minnesota
$1,945,000
G.O. Improvement Bonds, Series 2003A
NET DEBT SERVICE SCHEDULE
Storm Core
Revenues
Date
Principal
Coupon
Interest
Total P +I CIF
Net New D/S
105% of Total
Assessment
Required
(1)
(
(
( (
(
(
(
(
2/01 /2004
-
-
33,142.08
33,142.08 (33,142.08)
-
-
-
-
2/01/2005
210,000.00
1.650%
56,815.00
266,815.00 -
266,815.00
280,155.75
194,338.53
85,817.22
2101/2006
195,000.00
1.950%
53,350.00
248,350.00 -
248,350.00
260,767.50
176,976.30
83,791.20
2/01/2007
195,000.00
2.350%
49,547.50
244,547.50 -
244,547.50
256,774.88
170,465.48
86,309.40
2101/2008
195,000.00
2.700%
44,965.00
239,965.00 -
239,965.00
251,963.25
163,954.64
88,008.61
2101/2009
190,000.00
3.050%
39,700.00
229,700.00 -
229,700.00
241,185.00
157,443.80
83,741.20
2/01/2010
190,000.00
3.300%
, 33,905.00
223,905.00 -
223,905.00
235,100.25
150,932.98
84,167.27
2/01 /2011
190,000.00
3.400%
27,635.00
217,635.00 -
217,635.00
228,516.75
144,422.14
84,094.61
2/01/2012
190,000.00
3.550%
21,175.00
211,175.00 -
211,175.00
221,733.75
137,911.30
83,822.45
2/01/2013
195,000.00
3.650%
14,430.00
209,430.00 -
209,430.00
219,901.50
131,400.46
88,501.04
2/01/2014
195,000.00
3.750%
7,312.50
202,312.50 -
202,312.50
212,428.13
124,889.64
87,538.49
Total
1,945,000.00
-
381,977.08
2,326,977.08 (33,142.08)
2,293,835.00
2,408,526.75
1,552,735.27
855,791.48
Dated........................................................................................................................ ............................... 7/01/2003
DeliveryDate ............................................................................................................. ............................... 7/01/2003
FirstCoupon Date ..................................................................................................... ............................... 2/01 /2004
YIELD STATISTICS
BondYear Dollars ..................................................................................................... ............................... $11,744.58
AverageLife .............................................................................................................. ............................... 6.038 Years
AverageCoupon ....................................................................................................... ............................... 3.2523681%
NetInterest Cost ( NIC) ............................................................................................. ............................... 3.4179763%
TrueInterest Cost ( TIC) ........................................................................................... ............................... 3.4181255%
Bond Yield for Arbitrage Purposes ............................................................................ ............................... 3.2306466%
AllInclusive Cost ( AIC) ............................................................................................. ............................... 3.6350829%
IRS FORM 8038
NetInterest Cost ....................................................................................................... ............................... 3.2523681%
WeightedAverage Maturity ....................................................................................... ............................... 6.038 Years
Springsted Incorporated He = ROSEMO- I.SF -G.O. Improvement Bonds, Series 2003A- SINGLE PURPOSE
Advisors to the Public Sector 51192003 3:19 PM
Page 8
City of Rosemount, Minnesota
$1,170,000
G.O. Water Revenue Bonds, Series 2003B
SOURCES & USES
I Dated 07/01/2003 Delivered 07/01/2003 1
SOURCES OF FUNDS
Par Amount of Bonds ............................................... ............................... $1.170,000.00
Dakota County Tech College Contribution ................ ............................... 100,000.00
TOTAL SOURCES .................................................. ............................... $1,270,000.00
USES OF FUNDS
Primary Purpose fund ............................................. ............................... 975,000.00
City Engineering & Adminstration ............................. ............................... 259,750.00
Costs of Issuance .................................................... ............................... 20,050.00
Total Underwriters Discount (1. 000%) .................... ............................... 11,700.00
Rounding Amount ..................................................... ............................... 3,500.00
TOTAL USES .......................................................... ............................... $1,270,000.00
Springsted Incorporated 'File = ROSEMO- 1.SF -G.O Water Revenue Bonds, Series 20038- SINGLE PURPOSE
Advisors to the Public Sector 511912003 3:21 PM
Page 9
SIGNIFICANT DATES
DatedDate ........................................................................................................ ............................... 7/01/2003
DeliveryDate ..................................................................................................... ............................... 7/01/2003
First Coupon Date ....................................................................... ............................... ...................... 2 /01/2004
YIELD STATISTICS
BondYear Dollars ............................................................................................. ............................... $7,392.50
AverageLife ...................................................................................................... ............................... 6.318 Years
AverageCoupon ................................................................................................ ............................... 3.2946201%
Net Interest Cost ( NIC) ...................................................................................... ............................... 3.4528886%
True Interest Cost ( TIC) .................................................................................... ............................... 3.4542880%
Bond Yield for Arbitrage Purposes .................................................................... ............................... 3.2741873%
All Inclusive Cost ( AIC) ..................................................................................... ............................... 3.7687388%
IRS FORM 8038
Net Interest Cost .............................................................................................. ............................... 3.2946201%
Weighted Average Maturity ............................................................................... ............................... 6.318 Years
Springsted Incorporated File = ROSEMO- I.SF -G.O. Water Revenue Bonds, Series 20038- SINGLE PURPOSE
Advisors to the Public Sector 512812003 9:20 AM
Page 10
City of Rosemount, Minnesota
$1,170,000
G.O. Water Revenue Bonds, Series 20038
NET DEBT SERVICE SCHEDULE
Date
Principal
Coupon
Interest
Total P +I
Existing D/S
Net New D/S
2101/2004
-
-
20, 394.79
20,394.79
387,596.25
407,991.04
2101/2005
105,000.00
1.650%
34,962.50
139,962.50
394,126.25
534,088.75
2101/2006
105,000.00
1.950%
33,230.00
138,230.00
169,516.25
307,746.25
2/01/2007
110,000.00
2.350%
31,182.50
141,182.50
170,443.75
311,626.25
2/01/2008
110,000.00
2.700%
28,597.50
138,597.50
171,068.75
309,666.25
2/01/2009
115,000.00
3.050%
25,627.50
140,627.50
166,325.00
306,952.50
2/01/2010
115,000.00
3.300%
22,120.00
137,120.00
171,465.00
308,585.00
2101/2011
120,000.00
3.400%
18,325.00
138,325.00
171,065.00
309,390.00
2/01/2012
125,000.00
3.550%
14,245.00
139,245.00
170,300.00
309,545.00
2/01/2013
130,000.00
3.650%
9,807.50
139,807.50
174,200.00
314,007.50
2101/2014
135,000.00
3.750%
5,062.50
140,062.50
172,510.00
312,572.50
Total
1,170,000.00
-
243,554.79
1,413,554.79 2,318,616.25
3,732,171.04
SIGNIFICANT DATES
DatedDate ........................................................................................................ ............................... 7/01/2003
DeliveryDate ..................................................................................................... ............................... 7/01/2003
First Coupon Date ....................................................................... ............................... ...................... 2 /01/2004
YIELD STATISTICS
BondYear Dollars ............................................................................................. ............................... $7,392.50
AverageLife ...................................................................................................... ............................... 6.318 Years
AverageCoupon ................................................................................................ ............................... 3.2946201%
Net Interest Cost ( NIC) ...................................................................................... ............................... 3.4528886%
True Interest Cost ( TIC) .................................................................................... ............................... 3.4542880%
Bond Yield for Arbitrage Purposes .................................................................... ............................... 3.2741873%
All Inclusive Cost ( AIC) ..................................................................................... ............................... 3.7687388%
IRS FORM 8038
Net Interest Cost .............................................................................................. ............................... 3.2946201%
Weighted Average Maturity ............................................................................... ............................... 6.318 Years
Springsted Incorporated File = ROSEMO- I.SF -G.O. Water Revenue Bonds, Series 20038- SINGLE PURPOSE
Advisors to the Public Sector 512812003 9:20 AM
Page 10
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$1,945,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2003A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, July 1, 2003, until 10:00 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 7:30 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 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
(b) Electro Bidding. Notice is hereby given that electronic proposals will be received via
PARIT 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 sole) as a
communication mechanism to conduct the electronic bidding for the Bonds, and PARITY 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', 40 West 23' Street, 5"' Floor, New York City, New York 10010, Customer
Support, (212) 404 -8102.
Page 11
DETAILS OF THE BONDS
The Bonds will be dated July 1, 2003, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2004. 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:
2005 $210,000 2009 $190,000 2012 $190,000
2006 $195,000 2010 $190,000 2013 $195,000
2007 $195,000 2011 $190,000 2014 $195,000
2008 $195,000
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
The City will name the registrar that 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, 2011, and on any day thereafter, to prepay Bonds due on or
after February 1, 2012. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge special
assessments from benefited properties. The proceeds will be used to finance various
improvements within the City.
Page 12
TYPE OF PROPOSALS
Proposals shall be for not less than $1,925,550 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 $19,450,
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 underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect
thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the
Page 13
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,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (651) 223 -3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 80 copies of the
Official Statement and the addendum or addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated June 3, 2003
BY ORDER OF THE CITY COUNCIL
/s/ Linda Jentink
City Clerk
Page 14
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$1,170,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 2003B
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, July 1, 2003, until 10:00 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 7:30 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 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
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARIT7 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 sole) as a
communication mechanism to conduct the electronic bidding for the Bonds, and PARITY"' 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 40 West 23` Street, 5 th Floor, New York City, New York 10010, Customer
Support, (212) 404 -8102.
Page 15
DETAILS OF THE BONDS
The Bonds will be dated July 1, 2003, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2004. 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:
2005 $105,000
2006 $105,000
2007 $110,000
2008 $110,000
2009 $115,000
2010 $115,000
2011 $120,000
2012 $125,000
2013 $130,000
2014 $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
The City will name the registrar that 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, 2011, and on any day thereafter, to prepay Bonds due on or
after February 1, 2012. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge net
revenues derived through its water utility system. The proceeds will be used to finance
improvements to the water utility system in the City.
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TYPE OF PROPOSALS
Proposals shall be for not less than $1,158,300 and accrued interest on the total principal
amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ( "Deposit ") in
the form of a certified or cashier's check or a Financial Surety Bond in the amount of $11,700,
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 underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect
thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the
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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,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (651) 223 -3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 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 June 3, 2003
BY ORDER OF THE CITY COUNCIL
/s/ Linda Jentink,
City Clerk
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