HomeMy WebLinkAbout6.c. 1999A General Obligation Improvement Bond Issue Authorizing Issuance and Setting Bond Sale CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: May 18, 1999
AGENDA ITEM: 1999A G.O. Improvement Bond Issue - AGENDA SECTION:
Authorizing Issuance and Setting Bond Sale Consent
PREPARED BY: Jeff May, Finance Director AGEND����:�Yt � � �
ATTACHMENTS: Resolution and Recommendations APPROVED BY:
This item is on the agenda for your consideration in authorizing the issuance and setting the sale of
General Obligation Improvements Bonds for four projects: Project #287 - Wensmann 12th Addition;
Project#288 - Shannon Pond South; Project#303 - Conley Avenue; and Project#304 - McNamara
Phase 2.
Bids will be opened Monday, June 14, 1999, 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
$3,715,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1999A.
COUNCIL ACTION:
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 1999-
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $3,715,000 GENERAL OBLIGATION IMPROVEMENT BONDS,
SERIES 1999A
WHEREAS, the City Council of the City of Rosemount, Minnesota,
has heretofore determined that it is necessary and expedient to
issue its $3, 715, 000 General Obligation Improvement Bonds, Series
1999A (the "Bonds") to finance various improvements in 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• Findincts . The City Council hereby authorizes
Springsted to solicit bids for the competitive negotiated sale of
the Bonds.
2 . Meetinct• Bid Openincr. 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.
1047177.1
RESOLIITION 1999-
ADOPTED this 18th day of May, 1999 .
Cathy Busho, Mayor
ATTEST:
Susan M. Walsh, City Clerk
Motion by: Second by:
Voted in favor•
Voted Against :
ioa�i��.i 2
RESOLIITION 1999-
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
$3 , 715, 000 General Obligation Improvement Bonds, Series 1999A.
WITNESS my hand this day of , 1999 .
Clerk
ioa�i��.i 3
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
$3,715,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1999A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, June 14, 1999, 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
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 July 1, 1999, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2000. 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:
2001 5200,000 2005 $475,000 2009 $250,000
2002 $545,000 2006 �265,000 2010 $245,000
2003 $495,000 2007 �260,000 2011 $240,000
2004 $485,000 2008 �255,000
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
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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, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. 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 a11 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 pa�ticipant'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 against benefited property. The proceeds will be used to finance various
improvements within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $3,670,420 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 $37,150,
payable to the order of the City. If a check is used, it must accompany each proposal. If a
Financial Surety Bond is used, it must be from an insurance company ficensed 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 orde�. 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
C:lemail\rosemou.doc - ii -
without cause, and, (iii) reject any proposai 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 at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Briggs and Morgan,
Professional Association, of Saint Paul and Minneapolis, Minnesota, 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 o�ces 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 ta 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 O�cial 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
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information required by law, shall constitute a "Final O�cial Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
underuvriter 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 undenririter of the syndicate to which the Bonds are awarded 150 copies of
the Official Statement and the addendum or addenda described above. The City designates
the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent
for purposes of distributing copies of the Final Official Statement to each Participating
Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby
that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall
enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes
of assuring the receipt by each such Participating Underwriter of the Final Official Statement.
Dated May 18, 1999 BY ORDER OF THE CITY COUNCIL
/s/ Susan M. Walsh
City Clerk
snase�:zi ann
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Recommendations
For
City of Rosemount, Minnesota
$3,715,000
General Obligation Improvement Bonds, Series 1999A
Presented to:
Mayor Cathy Busho
Members, City Council
Mr. Thomas Burt, City Administrator
Mr. Jeffrey May, Finance Director
City of Rosemount
2875 145th Street West
Rosemount, MN 55068
SPRINGSTED
Public Finance Ailvisors
Study No.: R0704N4
SPRINGSTED Incorporated
May 12, 1999
RECOMMENDATIONS
Re: Recommendations for the Issuance of $3,715,000 General Obligation Improvement
Bonds, Series 1999A (the "Bonds")
The Bonds are being issued to finance the assessable portion of various improvement projects
within the City. In addition to proceeds of the Bonds, the City will contribute funds from its
Sanitary Sewer Core Fund, Storm Water Core Fund and Water Main Core Fund, and funds to
be received from Dakota County and the Minnesota Department of Transportation.
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 offering.
2. Sa/e Date and Time Monday, June 14, 1999 at 10:00 A.M., with
consideration for award at 7:30 P.M. that
same day.
3. Authority for the Bond Issue The Bonds are being issued pursuant to
Minnesota Statutes, Chapters 475 and 429.
4. Principal Amount of Offering $3,715,000.
5. Repayment Term The Bonds will mature annually each
February 1, 2001 through 2011. Interest will
be payable semi-annually each February 1
and August 1, commencing
February 1, 2000.
6. Source of Payment and Payment Cycle Special assessments will be filed in 1999 for
$1,038,000 of project costs, and in 2000 for
$2,631,758 of project costs. Since a
substantial portion of assessments will not
be filed until 2000 for first collection in 2001,
capitalized interest totaling $175,758 has
been included in the principal amount of the
Bonds and will be used, together with
assessments filed in 1999 and collected in
2000, to make the interest payments due on
February 1, 2000 through February 1, 2001.
Thereafter, the Bonds are expected to be
repaid solely from special assessments
against benefited property.
7. Prepayment Provisions The City may elect on February 1, 2005, and
on any date thereafter, to prepay the Bonds
due on or after February 1, 2006, at a price
of par plus accrued interest.
8. Credit Rating Comments We recommend the City apply to Moody's
Investors Service for a rating on the Bonds.
City of Rosemount, Minnesota
May 12, 1999
Moody's Investors Service currently rates
the City "A2."
9. 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, income 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. This
issue is 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
issuer is exempt from rebate and may retain
the excess earnings. The financing is
expected to meet one of the spend down
exemptions, in which case no rebate of
construction fund interest earnings will be
required. The City should be aware that this
test is an "actual" test, not one of
"reasonable expectations: and you will need
to determine if the spend down was met or if
rebate may be required. In any event, Bond
proceeds, if any, not set aside for project
expenditures may still be subject to rebate.
Springsted Incorporated assists the City with
it's rebate analysis under a separate
contract. An amendment to that contract
adding this issue has been provided to City
staff.
(c) Bona Fide Debt Service Fund The City must maintain a bona fide debt
service fund for the Bonds or be subject to
yield restriction. This requires restricting the
Page 2
City of Rosemount, Minnesota
May 12, 1999
investments held in the debt service fund to
the yield on the Bonds and/or paying back
excess investment earnings in the debt
service fund to the federal government. A
bona fide debt service fund is a fund for
which there is an equal �natching of revenue
to debt senrice 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 the improvements exceeds 20 years. The
average life of the Bonds is 5.93 years,
therefore the issue is within the economic
life requirements.
(e) Federal Reimbursement Federal reimbursement regulations require
Regulations 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 the City has taken whatever
actions are necessary to comply with the
federal reimbursement regulations in
regards to the Bonds. Non-bond funds can
be used to repay expenditures made prior to
receipt of Bond proceeds.
10. Continuing Disclosure The Bonds are subject to continuing
disclosure requirements set forth by the
Securities and Exchange Commission. The
SEC rules require the City to undertake an
annual update of certain Official Statement
information and report any material events
to the national repositories. Springsted
currently provides continuing disclosure
services for the City under a separate
contract. An amendment to that contract
adding this issue has been provided to City
staff.
11. Attachments • Assessment Income Schedule
. Debt Service Schedule
. Terms of Proposal
Page 3
City of Rosemount, Minnesota
May 12, 1999
DISCUSSION
The composition of the issue is as follows:
Project Costs:
Wensmann $512,100
Shannon Pond 559,000
Conley Avenue 1,717,716 (1)
McNamara 2"d 1,918,742 (1)
$4,707,558 (2)
Less Contributions:
MN DOT $350,000
Dakota County 511,500
Sanitary Sewer 38,700
Storm Water 89,200
Water Main 48,400
(1,037,800)
Net Project Costs $3,669,758
Plus:
Allowance for Discount Bidding 44,580
Rounding 662
Total Bond Issue $3,715,000
(1) Includes a pro rata share of capitalized interest, $85,016 for Conley and $90,742 for
McNamara.
(2) Includes $31,825 for estimated cost of issuance.
The Bonds will be dated July 1, 1999 and will be used to finance street and utility improvements
in various areas of the City. Debt service on the Bonds will be paid primarily with special
assessments. The City will file special assessments in 1999 for $1,038,000 of project costs to
be paid over five years. The City will file special assessments in 2000 for $2,631,758 of project
costs, including $175,758 of capitalized interest, to be paid over ten years. Assessments will be
paid with even annual principal payments. Interest will be charged on the unpaid principal
balance of the assessments at a rate of 2% over the rate on the Bonds, or 6.45% at current
estimates. Since a substantial portion of assessments will not be filed until 2000 for first
collection in 2001, the capitalized interest has been included in the principal amount of the
Bonds and will be used, together with the assessments filed in 1999 and collected in 2000, to
make the interest payments due on February 1, 2000 through February 1, 2001. Thereafter, it is
expected that the Bonds will be repaid solely from special assessments. Page 5 shows the .
schedule of projected assessment income grouped by length of the term of the projects.
The debt service schedule for this issue is shown on Page 5. Columns 1 through 6, show the
years and amounts of principal and estimated interest due on the Bonds. Column 7 shows the
capitalized interest included in the issue to make interest payments on February 1 and August
1, 2000, and February 1, 2001. Column 8 shows the net debt service requirement and column 9
shows the total to be available to pay debt service, including the 5% overlevy required by State
statute. Columns 10 and 11 show the total annual assessment income and net cashflow surplus
after funding the statutory debt service requirements.
Respectfully submitted,
� - � —
SPRINGSTED Incorporated
jam
Provided to Staff:
Rebate and Continuing Disclosure Contract Amendments
Page 4
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THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$3,715,000
CITY OF ROSEMOUNT, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1999A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Monday, June 14, 1999, 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
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 Propbsal. 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 July 1, 1999, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2000. Interest will
be computed on the basis of a 360-day year of finrelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
2001 $200,000 2005 $475,000 2009 $250,000
2002 $545,000 2006 $265,000 2010 $245,000
2003 $495,000 2007 $260,000 2011 $240,000
2004 $485,000 2008 $255,000
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 8� 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.
Page 7
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, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. 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 against benefited property. The proceeds will be used to finance various
improvements within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $3,670,420 and accrued interest on the total principal
amount of the �onds. 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 $37,150,
payable to the order of the City. If a check is used, it must accompany each proposal. If a
Financial Surety Bond is used, it must be from an insurance company licensed to issue such a
bond in the State of Minnesota, and preapproved by the City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City will deposit the check of the purchaser, the amount of which will be deducted at
settlement and no interest will accrue to the purchaser. In the event the purchaser fails to
comply with the accepted proposal, said amount will be retained by the City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or
1/8 of 1%. Rates must be in 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 which the City determines to have failed to comply
with the terms herein.
Page 8
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.
SETT'LEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a� place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Briggs and Morgan,
Professional Association, of Saint Paul and Minneapolis, Minnesota, 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
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
Page 9
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 150 copies of
the O�cial Statement and the addendum or addenda described above. The City designates
the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent
for purposes of distributing copies of the Final Official Statement to each Participating
Underwriter. Any underwriter delivering a proposal with respect to the�Bonds agrees thereby
that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall
enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes
of assuring the receipt by each such Participating Underwriter of the Final Official Statement.
Dated May 18, 1999 BY ORDER OF THE CITY COUNCIL
/s/ Susan M. Walsh
City Clerk
5/10/99 8:46 AM
Page 10