Loading...
HomeMy WebLinkAbout6.n. Authorize City to Pledge the Full Faith Credit for the 2000B G.O. Bonds for the Port AuthorityCITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: July 18, 2000 AGENDA ITEM: Ordinance Pledging City's Full Faith and Credit to Port Authority General Obligation Bonds, 2000B AGENDA SECTION: Consent PREPARED BY: Jeff May, Finance Director AGENDA 6 ATTACHMENTS: Ordinance APPROVED BY: Attached for your consideration is an ordinance for the City Council to pass that pledges the City's full faith and credit to the Port Authority's General Obligation Bonds, 2000B. These bonds are for the second phase of improvements in the Business Park. Because the debt is issued through the Port Authority, it is necessary for the City to pass this ordinance pledging its support. The City has passed an ordinance similar to this for all previous debt issued by the Port Authority. RECOMMENDED ACTION: Motion to adopt AN ORDINANCE AUTHORIZING THE CITY OF ROSEMOUNT TO PLEDGE THE FULL FAITH AND CREDIT OF THE CITY TO GENERAL OBLIGATION BONDS, SERIES 2000B OF THE ROSEMOUNT PORT AUTHORITY. COUNCIL ACTION: CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA ORDINANCE NO. AN ORDINANCE AUTHORIZING THE CITY OF ROSEMOUNT TO PLEDGE THE FULL FAITH AND CREDIT OF THE CITY TO GENERAL OBLIGATION BONDS, SERIES 2000B OF THE ROSEMOUNT PORT AUTHORITY THE CITY COUNCIL OF THE CITY OF ROSEMOUNT ORDAIN: SECTION I. Pursuant to and in accordance with the provisions of this ordinance and Minnesota Statutes, §469.048 to 469.068 and §469.0813 the issuance of general obligation bonds by the Rosemount Port Authority (the "Authority ") in the aggregate principal amount of $1,750,000 is hereby authorized and found to be proper; and said bonds shall be issued and sold for the purpose of securing funds as needed, in said aggregate amount, to finance infrastructure improvements in a business park. The pledge of the full faith, credit and resources of the City as security for the bonds is hereby authorized. Additional terms and conditions of the bonds, including interest rate, date, denomination, place of payment, form and maturity scheduled and provision for the sale thereof shall be determined by the Board of Commissioners of the Authority pursuant to resolution. SECTION II. This ordinance shall take effect and be in force following its passage and publication. ADOPTED this 18th day of July, 2000 Cathy Busho, Mayor ATTEST: Linda J. Jentink, City Clerk Published this day of July, 2000 in the "Rosemount Town Pages ". t Recommendations For City of Rosemount, Minnesota $1,160,000 General Obligation Water Revenue Bonds, Series 2000A Rosemount Port Authority, Minnesota $1,750,000 General Obligation Bonds, Series 20008 Presented to: Mayor Cathy Busho Members, City Council Mr. Thomas Burt, City Administrator Mr. Jeffrey May, Finance Director City of Rosemount 2875-145 th Street West Rosemount, Minnesota 55068 Study No.: R0704.114T4 SPRINGSTED Incorporated July 7, 2000 Port Authority Chair John Edwards Members, Port Authority Mr. Thomas Burt, Executive Director Rosemount Port Authority 2875 — 145 Street West Rosemount, Minnesota 55068 SPRINGSTED Public Finance Advisors F Vre. A� RECOMMENDATIONS Re: Recommendations for the Issuance of: $1,160,000 General Obligation Water Revenue Bonds, Series 2000A (the "Water Revenue Bonds ") $1,750,000 General Obligation Bonds, Series 2000B (the "Port Authority Bonds ") The Water Revenue Bonds are being issued to finance water system improvements, specifically for a new east side water tower. The Port Authority Bonds are being issued to finance street and utility improvements within the Rosemount Business Park. We recommend the following for the Bonds: 1. Action Requested To establish the date and time of receiving bids and establish the terms and conditions of the offerings. 2. Sale Date and Time Tuesday, August 15, 2000 at 11:00 A.M., with award by the City Council at 7:30 P.M. that same day, and award by the Port Authority at 6:00 P.M. that same day. 3. Authority for the Bond Issues The Water Revenue Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 444. The Port Authority Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 469. 4. Principal Amount of Offerings Water Revenue Bonds - $1,160,000 Port Authority Bonds - $1,750,000 5. Repayment Terms The Water Revenue Bonds will mature annually February 1, 2002 through 2016. Interest will be payable semi- annually each February 1 and August 1, commencing August 1, 2001. The Port Authority Bonds will mature annually February 1, 2002 through 2011. Interest will be payable semi - annually each February 1 and August 1 commencing August 1, 2001. 6. Sources of Payment and Payment Cycles The Water Revenue Bonds are expected to be paid from net revenues of the City's Water Utility, including water connection fees. It is not expected that the City will levy taxes for repayment of this issue. City of Rosemount, Minnesota Rosemount Port Authority, Minnesota July 7, 2000 7. Prepayment Provisions M 8. Credit Rating Comments Federal Treasury Regulations Concerning Tax - Exempt Obligations (a) Bank Qualification (b) Rebate Requirements (c) Bona Fide Debt Service Fund The Port Authority Bonds are expected to be paid from ad valorem tax levies and tax increment revenues. The tax levies will be made by the City for the Port Authority, and will be spread on all taxable property in the City. Both issues are callable as early as February 1, 2009, and any date thereafter, at a price of par plus accrued interest. We recommend the City apply to Moody's Investors Service for a rating on the Bonds. Moody's currently rates the City's general obligation issues "A2." 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 receive slightly lower interest rates than issues that are not bank qualified. These issues are designated as bank qualified. All tax - exempt issues are subject to the federal arbitrage and rebate requirements, which require all excess earnings created by the financing to be rebated to the U.S. Treasury, The requirements generally cover two categories: bond proceeds and debt service funds. There are exemptions from rebate in both of these categories. Since the City and Port Authority expect to issue less than $5,000,000 of tax - exempt obligations in 2000, these issues will be exempt from rebate. The City must maintain a bona fide debt service fund for both 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 Page 2 City of Rosemount, Minnesota ` Rosemount Port Authority, Minnesota July 7, 2000 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. (d) Economic Life The average life of the Bonds cannot exceed 120 % of the economic life of the projects to be financed. The economic life of water towers is approximately 50 years. The average life of the Water Revenue Bonds is 9.529 years. The economic life of the infrastructure improvements is 50 years. The average life of the Port Authority Bonds is 6.408 years. Both issues are therefore within the economic life requirements. 10. 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 to that contract adding these issues has been provided to City staff, 11. Attachments • Sources and Uses Schedule, Water Revenue Bonds • Debt Service Schedule, Water Revenue Bonds • Sources and Uses Schedule, Port Authority Bonds • Debt Service Schedule, Port Authority Bonds • Terms of Proposal Page 3 City of Rosemount, Minnesota Rosemount Port Authority, Minnesota July 7, 2000 DISCUSSION $1,160,000 G.O. Water Revenue Bonds, Series 2000A (the "Water Revenue Bonds ") The Water Revenue Bonds are being used to finance the construction of a new east side water tower. The sources and uses schedule on page 5 shows the sizing of the bond issue. Page 6 provides the recommended debt service schedule for the issue. The Water Revenue Bonds have been structured over a 15 -year period with even annual payments. Although the Water Revenue Bonds are general obligations of the City, they will be paid from net revenues of the City's Water Utility, including water connection fees. Net water revenues are also being used to pay the City's outstanding Series 1993C and 1996C Bonds, which financed water system improvements as well $1,750,000 G.O. Bonds, Series 20008 (issued by the Rosemount Port Authority) (the "Port Authority Bonds ") Proceeds of the Port Authority Bonds will be used to finance street and utility improvements for the Rosemount Business Park. The sizing of the issue is provided on the Sources and Uses table on page 7 and the proposed debt schedule is provided on page 8. The Port Authority Bonds have been structured over ten years in even annual payments. With the inclusion of the statutorily required 5% overlevy, the average annual payment is estimated to be approximately $243,931. We understand the City expects to use a combination of tax increment revenues and Port Authority levies (spread by the City) to make debt service payments. Beginning with the levy made in fall 2000, tax increment and levy collections received each year will be used to cover the August 1 interest payment due in the collection year and the subsequent February 1 principal and interest payment. Proceeds for both issues are expected to be available by early September. Respectfully submitted, ,� c� cs� t�! SPRINGSTED Incorporated amn Provided to Staff: a) Amendment to Continuing Disclosure Contracts Page 4 City of Rosemount, Minnesota $1,160,000 G.O. Water Revenue Bonds, Series 2000A SOURCES & USES Dated 09/01/2000 Delivered 09/01/2000 SOURCES OF FUNDS Par Amount of Bonds ....................................................... $1,160,000.00 TOTAL SOURCES ............................ ............................... $1,160,000.00 USES OF FUNDS Deposit to Project Construction Fund . ............................... 1,128,800.00 Costs of Issuance .............................. ............................... 16,700.00 Total Underwriter's Discount (1. 250 %) ............................. 14,500.00 TOTAL USES .. ............................... $1,160,000.00 Springsted Incorporated Pubic Finance Advisors Fie = ROSEMOUNT.SF -G.O. Water Rev.2000 7/ 6/200011:17 AM Page 5 SIGNIFICANT DATES DatedDate .......................................................................... ............................... 9/01/2000 DeliveryDate ...................................................................... ............................... 9/01/2000 FirstCoupon Date ............................................................... ............................... 8/01/2001 YIELD STATISTICS BondYear Dollars ............................................................... ............................... $11,053.33 AverageLife ........................................................................ ............................... 9.529 Years AverageCoupon ................................................................. ............................... 5.3384688% Net Interest Cost ( NIC) ........................................................ ............................... 5.4696509% True Interest Cost ( TIC) ....................................................... ............................... 5.4893070% Bond Yield for Arbitrage Purposes ....................................... ............................... 5.3131422% AllInclusive Cost ( AIC) ....................................................... ............................... 5.6961491% Springsted Incorporated Fie = ROSEMOUNT.SF -G. O. Water Rev.2000 Public Finance Advisors 7/ 6/200011:17 AM Page 6 City of Rosemount, Minnesota $1,160,000 G.O. Water Revenue Bonds, Series 2000A DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P +1 2/01/2001 - - - - 2/01 /2002 30,000-00 4.800% 85, 998.75 115, 998.75 2/01/2003 55,000.00 4.850% 59,265.00 114,265.00 2/01/2004 60,000.00 4.900% 56,597.50 116,597.50 2/01/2005 65,000.00 4.950% 53,657.50 118,657.50 2/01/2006 65,000.00 5.000% 50,440.00 115,440.00 2/01/2007 70,000.00 5.050% 47,190.00 117,190.00 2/01/2008 75,000.00 5.100% 43,655.00 118,655.00 2/01/2009 75, 000.00 5.150% 39, 830.00 114, 830.00 2101/2010 80,000-00 5.200% 35, 967.50 115, 967.50 2/01/2011 85,000-00 5.250°x6 31, 807.50 116, 807.50 2/01/2012 90,000.00 5.300% 27,345.00 117,345.00 2/01/2013 95,000-00 5.350% 22, 575.00 117, 575.00 2/01/2014 100, 000.00 5.450% 17, 492.50 117, 492.50 2/01/2015 105,000.00 5.550% 12,042.50 117,042.50 2/01/2016 110,000.00 5.650% 6,215.00 116,215.00 Total 1,160,000.00 - 590,078.75 1,750,078.75 SIGNIFICANT DATES DatedDate .......................................................................... ............................... 9/01/2000 DeliveryDate ...................................................................... ............................... 9/01/2000 FirstCoupon Date ............................................................... ............................... 8/01/2001 YIELD STATISTICS BondYear Dollars ............................................................... ............................... $11,053.33 AverageLife ........................................................................ ............................... 9.529 Years AverageCoupon ................................................................. ............................... 5.3384688% Net Interest Cost ( NIC) ........................................................ ............................... 5.4696509% True Interest Cost ( TIC) ....................................................... ............................... 5.4893070% Bond Yield for Arbitrage Purposes ....................................... ............................... 5.3131422% AllInclusive Cost ( AIC) ....................................................... ............................... 5.6961491% Springsted Incorporated Fie = ROSEMOUNT.SF -G. O. Water Rev.2000 Public Finance Advisors 7/ 6/200011:17 AM Page 6 Rosemount Port Authority, Minnesota $1,750,000 G.O. Bonds, Series 2000B SOURCES & USES Dated 09/01/2000 Delivered 09/01/2000 SOURCES OF FUNDS Par Amount of Bonds ........................ ............................... $1,750,000.00 TOTAL SOURCES ............................ ............................... $1,750,000.00 USES OF FUNDS Deposit to Project Construction Fund . ............................... 1,712,800.00 Costs of Issuance .............................. ............................... 19,700.00 Total Underwriter's Discount (1. 000 %) ............................. 17,500.00 TOTAL USES .................................... ............................... $1,750,000.00 Springsted Incorporated Fie = ROSEMOUNT.SF•PortAuth GO Pubfic Finance Advisors 7 /6/200!) 11:14 AM Page 7 SIGNIFICANT DATES Rosemount Port Authority, Minnesota Dated.................................................................................. ............................... 9/01/2000 DeliveryDate ....................................................................... ............................... $1,750,000 FirstCoupon Date ............................................................... ............................... 8/01/2001 YIELD STATISTICS G.O. Bonds, Series 20008 $11,214.17 AverageLife ................................................................... ............................... 6.408 Years DEBT SERVICE SCHEDULE 5.1109887% Net Interest Cost ( NIC) ........................................................ ............................... Date Principal Coupon Interest Total P +I 105% Levy 2/01/2001 5.5035401°x6 - - - - 2/01/2002 110, 000.00 4.800% 125,187.29 235,187.29 246, 946.66 2/01/2003 150,000.00 4.850°x6 83,087.50 233,087.50 244,741.88 2/01/2004 155,000-00 4.900% 75, 812.50 230, 812.50 242, 353.13 2/01/2005 165,000.00 4.950% 68,217.50 233,217.50 244,878.38 2/01/2006 170,000-00 5.000% 60, 050.00 230, 050.00 241, 552.50 2/01/2007 180,000-00 5.050°x6 51, 550.00 231, 550.00 243,127.50 2/01/2008 190,000.00 5.100% 42,460.00 232,460.00 244,083.00 2/01/2009 200,000.00 5.150% 32,770.00 232,770.00 244,408.50 2/01/2010 210,000.00 5.200% 22,470.00 232,470.00 244,093.50 2/01/2011 220,000-00 5.250% 11, 550.00 231, 550.00 243,127.50 Total 1,750,000.00 - 573,154.79 2,323,154.79 2,439,312.53 SIGNIFICANT DATES Dated.................................................................................. ............................... 9/01/2000 DeliveryDate ....................................................................... ............................... 9/01/2000 FirstCoupon Date ............................................................... ............................... 8/01/2001 YIELD STATISTICS BondYear Dollars ............................................................... ............................... $11,214.17 AverageLife ................................................................... ............................... 6.408 Years AverageCoupon .................................................................. ............................... 5.1109887% Net Interest Cost ( NIC) ........................................................ ............................... 5.2670413% True Interest Cost (TIC) ....................................................... ............................... 5.2857684% Bond Yield for Arbitrage Purposes ....................................... ............................... 5.0951657% All Inclusive Cost ( AIC) ........................................................ ............................... 5.5035401°x6 Springsted Incorporated File = ROSEMOUNT.SF -Port Auth GO Pub#c Finance Advisors 7/ 62000 11:14 AM Page 8 THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,160,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 2000A (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Tuesday, August 15, 2000, until 11:00 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 Proposals may be submitted in a sealed envelope or by fax (651) 223 -3002 to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3002 for inclusion in the submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner of the Proposal submitted. DETAILS OF THE BONDS The Bonds will be dated September 1, 2000, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2001. 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: 2002 $30,000 2006 $65,000 2010 $80,000 2014 $100,000 2003 $55,000 2007 $70,000 2011 $85,000 2015 $105,000 2004 $60,000 2008 $75,000 2012 $90,000 2016 $110,000 2005 $65,000 2009 $75,000 2013 $95,000 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 Page 9 participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2009, and on any day thereafter, to prepay Bonds due on or after February 1, 2010. 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 of its water system. The proceeds will be used to finance water system improvements. TYPE OF PROPOSALS Proposals shall be for not less than $1,145,500 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 $11,600, 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 City will deposit the check of the purchaser, the amount of which will be deducted at settlement and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 %. Rates must be in 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. Page 10 The City will reserve the right to: (i) waive non - substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and, (iii) reject any proposal which the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT Within 40 days following the date of their award, the Bonds will be delivered without cost to the purchaser 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 which shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non - compliance with said terms for payment. CONTINUING DISCLOSURE On the date of 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 Page 11 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 50 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated July 18, 2000 BY ORDER OF THE CITY COUNCIL /s/ Linda Jentink City Clerk 717/00 11:31 AM Page 12 THE AUTHORITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,750,000 ROSEMOUNT PORT AUTHORITY GENERAL OBLIGATION BONDS, SERIES 2000B (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Tuesday, August 15, 2000, until 11:00 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 Authority Board of Commissioners at 6:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Proposals may be submitted in a sealed envelope or by fax (651) 223 -3002 to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3002 for inclusion in the submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the Authority to purchase the Bonds regardless of the manner of the Proposal submitted. DETAILS OF THE BONDS The Bonds will be dated September 1, 2000, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2001. 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: 2002 $110,000 2006 $170,000 2010 $210,000 2003 $150,000 2007 $180,000 2011 $220,000 2004 $155,000 2008 $190,000 2005 $165,000 2009 $200,000 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 Page 13 owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The Authority will name the registrar which shall be subject to applicable SEC regulations. The Authority will pay for the services of the registrar. OPTIONAL REDEMPTION The Authority may elect on February 1, 2009, and on any day thereafter, to prepay Bonds due on or after February 1, 2010. Redemption may be in whole or in part and if in part at the option of the Authority and in such manner as the Authority shall determine. If less than all Bonds of a maturity are called for redemption, the Authority 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 of Rosemount for which the City of Rosemount will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds will be used to finance infrastructure improvements in a business park. TYPE OF PROPOSALS Proposals shall be for not less than $1,732,500 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 $17,500, payable to the order of the Authority. 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 Authority. 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 Authority to satisfy the Deposit requirement. The Authority will deposit the check of the purchaser, the amount of which will be deducted at settlement and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the Authority. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the Authority 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 118 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 determined on a true interest cost (TIC) basis. The Authority's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. Page 14 The Authority will reserve the right to: (i) waive non - substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and, (iii) reject any proposal which the Authority 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 Authority has requested and received a rating on the Bonds from a rating agency, the Authority 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 which shall be received at the offices of the Authority or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the Authority, or its agents, the purchaser shall be liable to the Authority for any loss suffered by the Authority 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 Authority will execute and deliver a Continuing Disclosure Undertaking (the "Undertaking ") whereunder the Authority will covenant for the benefit of the owners of the Bonds to provide certain financial and other information about the Authority and notices of certain occurrences to information repositories as specified in and required by SEC Rule 15c2- 12(b)(5). OFFICIAL STATEMENT The Authority 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 Authority, Springsted Page 15 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 Authority 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 Authority 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 70 copies of the Official Statement and the addendum or addenda described above. The Authority 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 Authority (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 July 18, 2000 BY ORDER OF THE BOARD OF COMMISSIONERS /s/ Linda Jentink Executive Secretary 7/7/00 11:35 AM Page 16