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HomeMy WebLinkAbout6.d. 1997B Bond Issue - Authorize Issuance & Setting Bond Sale CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: October 21, 1997 AGENDA tTEM: 19978 Bond Issue -Authorizing Issuance AGENDA SECTION: and Setting Bond Sale Consent PREPARED BY: Jeff May, Finance Director AGENDA NO. �p•� . 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 lmprovements Bonds for three projects: (1) Project#283 - Shannon Pond East 2nd Addition; (2) Project#285 - Biscayne Pointe; and (3) Project#286 - Brockway Draw Trunk Sanitary Sewer Phase 1. All three of these projects have begun construction or will be beginning construction shortly. Bids will be opened Tuesday, November 18, 1997, at 11;00 A.M. at the offices of Springsted Incorporated. The bids will be tabulated there and then consideration for award of theBonds wili 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 COMPE7ITIVE NEGOTIATED SALE OF $1,595,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1997B. COUNCIL ACTION: � . CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 1997- RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF $1, 595, 000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1997B WHEREAS, the City Council of the City of Rosemount, Minnesota, (the "City") has heretofore determined that it is necessary and expedient to issue its $1, 595, 000 General Obligation Improvement Bonds, Series 1997B (the "Bonds" ) to finance various improvement projects in the City; and WIiEREAS, 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; Findincrs . The City Council hereby authorizes Springsted to solicit bids for the competitive negotiated sale of the Bonds . 2 . Meeting; Bid Openinct. 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 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. il 366727.1 'I � _ -_ _ _ ___- . , ADOPTED this 21st day of October, 1997 . , Cathy Busho, Mayor li ATTEST: '' Susan M. Walsh, City Clerk ', Motion by: Seconded by: Voted in favor: - Voted Against: 366727.1 THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEtVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,595,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1997B (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Tuesday , November 18, 1997, until 11:30 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 (612) 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 (612) 223-30Q0 or fax (612) 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. Proposals may also be filed electronically via PARITY, in accordance with PARITY Rules of Participation and the Terrns of Proposal, � within a one-hour period prior to the time of sale established above, but no Proposals will be received after that time. If provisions in the Terms of Proposal conflict with the PARITY Rules of Participation, the Terms of Proposal shall control. The normal fee for use of PARITY may be obtained from PARfTY and such fee shall be the responsibility of the bidder. For further � information about PARITY, potential bidders may contact PARITY at 500 Main Street, Suite 1010, Fort Worth, TX 76102, telephone (817) 885-8900. Neither the City nor Springsted Incorporated assumes any liability if there is a malfunction of PARITY. 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 December 1, 1997, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 1998. Interest wilF 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: 2000 $190,000 2004 $160,000 2008 $145,OQ0 2001 $170,000 2005 $155,000 2009 $145,000 2002 $165,000 2006 $155,000 2003 $160,000 2007 $150,000 . . 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 Bonds, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede 8� Co. as nomines 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 p�incipai 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 eondition 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 all Bonds of a maturity are called for redemption, the City wilt notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participanYs 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 improvement projects within the City. TYPE OF PROPOSALS Proposals shall be for not less than $1,579,050 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 $15,950, 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 p�ior 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 cashiers 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 Gity. 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 shail be in integrai multiples of 5/100 or 1/8 of 1%. Rates must be in 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. 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 Bonds nor any enor 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 wilt 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 I,i shall be made in federal, or equivalent, funds which shall be received at the offices of the City or its designee not later than a 2:00 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 the actual issuance and delivery of the Bonds, the City will execute and deliver a Continuing Disclosure Undertaking whereunder the City will covenant to provide, or cause to be provided, annual financial information, including audited financial statements of the City, and notices of certain material events, 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 (612} 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 65 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 October 21, 1997 BY ORDER OF THE CITY COUNCIL /s!Susan Walsh City Clerk . � Recommendations ' For '', . . City of Rosemount, Minnesota $1,595,000 Generai Obligation Improvement Bonds, Series 1997B Presented to: Mayor Cathy Busho Members, City Councii Mr. Thomas Burt, Administrator Mr. Jeffrey May, Finance Director City of Rosemount 2875 145th Street West Rosemount, MN 55068 SPRINGSTED Public Finance Advisors Study No.: R0704H4 SPRINGSTED Incorporated October 15, 1997 , RECOMMENDATIONS Re: Recommendations for the Issuance of $1,595,000 Generai Obligation tmprovement Bonds, Series 1997B Proceeds of the bonds will be used to finance the assessable portion of three improvement projects within the City: Project 285 (Biscayne Point), Project 286 (Brockway Draw Trunk Sanitary Sewer, Phase-1), and Project 283 (Shannon Pond East, 2nd addition). In addition to the bond proceeds, the City will contribute available funds from its storm core fund, sanitary sewer core fund and water core funds to pay for the above projects. The composition of this issue is shown on page 4. 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 Tuesday, November 18, 1997, at 11:30 A.M., with award that evening at 7:30 P.M. 3. Authority and Purpose for the Bond Issue The bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475, to finance various street and utility improvement projects within the City. 4. Principal Amount of Otiering $1,595,000 , 5. Repayment Term The first interest payment on the bonds is ' due August 1, 1998. Principal will be due , February 1, 2000 through 2009. ' 6. Source of Payments Since income from special assessments will not be received until 1999, capitalized interest, totaling $82,742, has been added to the principal account of the issue and wili be used to make interest payments due through February 1, 1999. Thereafter, the bonds will be repaid from special assessments against benefited property. 7. Prepayment Provisions The bonds maturing February 1, 2006 through 2009 will be callable on February 1, 2005 and any day thereafter at a price of par plus accrued interest: 8. Credit Rating Comments An application will be made to Moody's Inventors Service for a rating on this issue. The City is currently rated "A2" by Moody's Investor Service. 9. Bank Quali�cation The City does not expect to issue over $10,000,000 of tax-exempt obiigations in 1997, and therefore this issue will be bank- qualified. Issues which are bank-qualified City of Rosemount, Minnesota October 15, 1997 generally receive interest rates which are lower than issues which are not bank- qualified. 10. Rebate Requirements This issue is subject to the federal arbitrage requirements. However, since the City wili issue less than $5,000,000 in tax-exempt financings in 1997, it may exempt itself from rebating federal arbitrage earnings on the investment of proceeds to the federal government. 11. Bona Fide �ebt Service Fund The City must maintain a bona fide debt service fund for the bonds or be subject to yield restrictian or pay back excess investment earnings in the debt service fund to the federal government . A bona fide debt service fund is a fund for which there is an equal matching of revenue to debt service expense, with a carry-aver permitted equal to the greater of the investment eamings in the fund during that year or 1/12 of the debt service of that year. 12. Economic Life The average life of the bonds cannot exceed 120% of the economic life of the projects to be financed. The economic life of the street and utility improvements is 20 and 50 years, respectively. The bonds are therefore within the economic life requirements. 13. FederaJ Reimbursement Regulations Federal reimbursement regulations require the City to make a declaration, within 60 days of the actual payment, of its intent to reimburse itself from expenses paid prior to , the receipt of bond proceeds. It is our ! understanding the City has taken whatever ' actions are necessary to comply with the federal reimbursement regulations. 14. Continuing Disclosure This issue is subject to the continuing disclosure requirements: These SEC rules require the City to undertake an annuat update of its Official Statement information and report any material events to the national repositories. Springsted currently provides continuing disclosure services for the City under separate eontract. An amendm$nt to that contract adding this issue has been provided to City staff. . 15. Attachments Allocation of Bond Costs Schedule Assessment Income Schedule Debt Service Schedule Terms of Proposal Page 2 � City of Rosemount, Minnesota October 15, 1997 DISCUSSION Page 5 of these recommendations shows the projection of special assessment income. Assessments totaling $1,595,000 of principal are expected to be filed on or about October 15, 1998. Assessments will be spread over a term of 10 years in even annual instaliments of principal with interest charged on the unpaid balance at a rate of 2% over the net interest rate on the bonds. For structuring purposes we have estimated the assessment rate to be 6.6%. Capitalized interest has been included in the principal amount of the assessments. The debt service schedule for this issue is shown on page 6. 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 due prior to the first collection of assessments in 1999. Column 8 shows the net amount required to pay 100% of the debt service, with column 9 showing the 5% overlevy required by State statute. The overlevy is required by State Statute as a protection to the City and the bondholder in the event of delinquencies in the collection of special assessments for repayment of the bonds. Column 10 shows the projection of assessment income developed on page 5. The annual surplus of assessment income over the debt service �equirement at 105% is shown in Column 11. Respectfully submitted, ,�,�-��. -�t�=d �. �-c4;f�r,�..�� . , � ��� SPRINGSTED Incorporated Jmm Provided to Staff: a} Amendment to Continuing Disclosure Contract Page 3 City of Rosemount, Minnesota Allocation of Bond Costs General Obiigation Improvement Bonds, 1997B City Percent of Assessable Portion Costs of Capitalized Unden�vnters Totals Pro'ects Total of 8ond Costs Issuance Interest Discount Biscayne Point 47.740% $702,000 $12,335 �39,501 $7,615 $761,451 #285 Brockway Draw Trunk 30.328%0 445,970 7,837 25,094 4,837 483,738 Sanitary Sewer#286 Phase 1 Shannon Pond East 21.932% 322,500 5,667 18,147 3,498 349,812 2nd Addition#283 Totals 100.000% $1,470,470 $25,838 $82,742 $15,950 $1,595,OQ0 Page 4 � City of Rosemount, Minnesota Prepared October 13, 1997 Assessment Income By SPRINGSTED Incorporated PROJECTED ASSESSMENT INCOME Assessment Income Filing Oate: 10/15/1998 Filing Collect Interest Year Year Principal � 6.600� Total 1998 1999 159,500 127,766a 287,266 1999 2000 159,500 94,743 254,243 2000 2001 159,500 84,216 243,716 2001 2002 159,500 73,689 233,189 2002 2003 159,500 63,162 222,662 2003 2004 159,500 52,635 212,135 2004 2005 159,500 42,108 201 ,608 2005 2006 159,500 31 ,581 191 ,OSf 2006 2007 159,500 21 ,054 180,554 2007 2008 159,500 10,527 170,027 TOTALS 1 ,595,000 601 ,481 2,196,481 a Includes interest from filing ) date to 12/31/1999. v o� co N � City of Rosemount, Minnesota Prepared October 13, 1997 General Obligation Improvement Bonds, Series 1997B By SPRINGSTED Incorporated Dated: 12- 1 -1997 �ature: 2- 1 First Interest: S- i -1998 Total Capital- Net Assessment Year of Year of Principal ized Levy 105� Income Annual Levy Mat. Principal Rates Interest & Interest Interest Required of Total Surplus (1 ) (2) �3) �4) �5) ls) �7) �8) �9) ���) (11 � 1997 1999 0 0.00� 82,742 82,742 82,742 0 0 0 0 1998 2000 190,000 4.05� 70,922 260,922 0 260,922 273,968 287,266 13,298 1999 2001 170,000 4.15� 63,227 233,227 0 233,227 244,888 254,243 9,355 2000 2002 165,000 4.25� 56,172 221 ,172 0 221 ,172 232,231 243,716 11 ,485 2001 2003 160,000 4.35� 49,159 209,159 0 209,159 219,617 233,189 13,572 2002 2004 160,000 4.45� 42,199 202,199 0 202,199 212,309 222,662 10,353 2003 2005 155,000 4.55� 35,079 190,079 0 190,079 199,583 212,135 12,552 2004 2006 155,000 4.60� 28,026 183,026 0 183,026 192,177 201 ,608 9,431 2005 2007 150,000 4.65� 20,896 170,896 0 170,896 179,441 191 ,081 11 ,640 2006 2008 145,000 4.75� 13,921 158,921 0 158,921 166,867 180,554 13,687 2007 2009 t45,000 4.85� 7,033 152,033 0 152,033 159,635 170,027 10,392 TOTALS: 1 ,595,000 469,376 2,064,376 82,742 1 ,981 ,63A 2,080,716 2,198,481 Bond Years: 10,295.83 Annual Interest: 469,376 Avg. �aturity: 6.46 Plus Discount: 15,950 Avg. Annual Rate: 4.559� Net Interest: 485,326 T.I .C. Rate: 4.730� N.I.C. Rate: 4.714� Tnterest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. � i « iD � THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OFPROPOSAL Ili, $1,595,000 ' CITY OF ROSEMOUNT, MINNESOTA ' GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 19976 (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Tuesday, November 18, 1997, untii 11:30 A.M., Central Time, at the o�ces 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 wili be by the City Councii at 7:30 P.M., Centrai Time, of the same day. SUBMISSION OF PROPOSALS Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted. Signed Proposais, 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 (612) 223-3000 or fax (612) 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. Proposals may also be filed electronically via PARIT`(, in accordance with PARITY Rules of Participation and the Terms of Proposal, within a one-hour period prior to the time of sale established above, but no Proposals will be received after that time. If provisions in the Terms of Proposai conflict with the PARITY Rules of Participation, the Terms of Proposal shall control. The normal fee for use of PARITY may be obtained from PARITY and such fee shall be the responsibility of the bidder. For further � information about PARITY, potential bidders may contact PARITY at 500 Main Street, Suite 1010, Fort Worth, TX 76102, telephone (817) 885-8900. Neither the City nor Springsted Incorporated assumes any liability if there is a malfunction of PARITY. 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. DETAtLS OF THE BONDS The Bonds will be dated December 1, 1997, as the date of original issue, and wi11 bear interest payable on February 1 and August 1 of each year, commencing August 1, 1998. 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: 2000 $190,000 2004 $160,000 2008 $145,000 2001 $170,000 2005 $155,000 2009 $145,000 2002 $165,000 2006 $155,000 2003 $160,000 2007 �150,000 Page +' BOOK ENTRY SYSTEM II The Bonds wiii be issued by means of a book entry system with no physical distribution of ' Bonds made to the public. The Bonds wiil be issued in fuily registered form and one Bonds, , 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. {ndividual purchases of the 8onds may be made in the principal amount of $5,000 or any multipie 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 norninee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC wiil 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 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. ff 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 futl 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 improvement projects within the City. TYPE OF PROPOSALS Proposals shall be for not less than $1,579,050 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 $15,950, payable to the order of the City. If a check is used, it must accompany each proposal. If a Financial Suret Bond is used, it must be from an insurance company licensed to issue su ch a Y inn so and rea roved b the Cit . Such bond must be submitted to I bond in the State of M e ta, y P PP Y n must ' ncial Suret Bo d osals . The Fina Springsted Incorpo�ated prior to the opening of the prop Y 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 Page 8 City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shail be in integrai muitiples of 5/100 or 1/8 of 1°/a. Rates must be in 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 nan-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. I, BOND lNSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment I 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 Bonds 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 setttement 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 a 2:00 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. Page g � CONTtNUING DISCLOSURE On the date of the actuai issuance and delivery of the Bonds, the City will execute and deliver a Continuing Disclosure Undertaking whereunder the City will covenant to provide, or cause to be provided, annual financial information, including audited financial statements of the City, and notices of ce�tain material events, as specified in and required by SEC Rule 15c2-12(b)(5). OFFICIAL STATEMENT The City has authorized the preparation of an O�cial Statement containing pertinent information retative to the Bonds, and said Official Statement will serve as a nearly-final Official i, Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. ', For copies of the O�cial 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 (612) 223-3000. The Official Statement, when furkher supplemented by an addendum or addenda specifying the maturity dates, principal amounts and inte�est rates of the Bonds, together with any other 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 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 65 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 shal( 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 October 21, 1997 BY ORDER OF THE CITY COUNCIL /s/ Susan Walsh City Clerk page 10