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2. 1992 Bond Issue - Authorizing Issuance and Setting Bond Sale (1992E)
EXECUTIVE SUMMARY FOR ACTION PORT AUTHORITY COMMISSION MEETING DATE: October 13, 1992 AGENDA ITEM: 1992 Bond Issue - Authorizing AGENDA SECTION: Issuance and Setting Bond Sale(1992E) New Business PREPARED BY: AGENDA NO. Jeff May, Finance Director ATTACHMENTS: Port Authority Resolution, AP VED BY: Springsted Recommendations This item is on the agenda for your consideration in authorizing the issuance and setting the sale of General Obligation Municipal Building Bonds, Series 1992E. These bonds will be issued through the Port Authority and utilized for three components of the National Guard Armory Project. The three components are: (1) the construction of an ice arena; (2) the additional funding needed to make up the deficit between what the February, 1992 referendum approved for the upgrades of the Banquet Facility and the Theatre and what the actual bids came in at; and (3) the purchase and/or relocation of businesses adjacent to the National Guard Armory on Highway 3. Bids will be opened Tuesday, October 27, 1992, at 11:00 A.M., Central Time, at the offices of Springsted Incorporated. The bids will be tabulated there, and then consideration for award of the Bonds will by the Port Authority at 7:30 P.M., Central Time, of the same day. Settlement of the Bonds will occur within 40 days following the date of the award. RECOMMENDED ACTION: Motion to adopt A RESOLUTION PROVIDING FOR THE SALE OF $3,425,000 GENERAL OBLIGATION MUNICIPAL SERIES 1992E. PORT AUTHORITY ACTION: COMPETITIVE NEGOTIATED BUILDING BONDS, OPPM RI UGS AND`Y10RORN ST, PAUL 612 223 6645 (THU) 10, 08' 92 16:07 /ST, 15:44 / N0, 3360015-391 P. 8/17 CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 1992 A RESOLUTION PROVIDING FOR TRE COMPETITIVE`N$GOTIATED SALE OF $3,425,000 GENERAL OBLIGATION MUNICIPAL BUILDING BONDS, SERIES 1992$ WHEREAS, the Board of Commissioners of the Port Authority of the City of Rosemount, Minnesota, has heretofore determined that it is necessary and expedient to issue its $3,425,000 General obligation Municipal Building Bonds, Series 1992E (the "Bonds") to finance the costs of a municipal ice arena and a portion of the costs of an auditorium and banquet facility which are being constructed as a part of a multipurpose community center -national guard armory; and WHEREAS, the Authority 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, TREREFORE, BE IT RESOLVED by the Board of Commissioners of the Port Authority of the City of Rosemount, Minnesota, as follows: 1. Authorization;. Findings. The Board of Commissioners hereby authorizes Springsted to solicit bids for the competitive negotiated sale of the Bonds. 2. Meeting; Bid opening. This Board of Commissioners 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 Executive Director, 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. 226M FROM BRI.GGS AND' MORGAN ST, PAUL 612 223 6645 (THU) 10, 08' 92 16:07 /ST, 15:44/ N0, 3360015-391 P. 9/17 4,9-tt i cial Statgmerxt.In connection with said competitive negotiated sale, the Executive Director and other officers or employees of the Authority 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 Authority upon its completion M)opTSD this 13th day of October, 1992. i ATTEST: Susan M. Walsh, secretary Motion by: Voted in favor: Voted Against= Ed Dunn, Chairperson Seconded by: 2226M 2 FROM BRIGGS' A2 ,1MORGAN ST, PAUL 612 223 5645 (THU) 10, 03' 92 16:08 /K.15:44/ NO, 3360015-391 P. 10/17 Exhibit A THE PORP AUTHORITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL EE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $3,425,000 PORT AUTHORITY OF THE CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION IR SOC�L BUILDING BONDS, Proposals for the Bonds will be received on Tuesday, October 27, 1992, until 1i:00 A.M., pr Central Time, at the offices of Si ngsted 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 at 7:30 P.M., Central Time, of the same day. DETAILS OF THE BONDS The Bonds will be dated November 1 1992, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 1993. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Bonds will be issued in the denomination of $5,000 each, or in Integral multiples thereof, as requested by the purchaser, and fully registered as to principal and interest. Principal will be payable at the main corporate office of the registrar and interest on each Bond will be payable by check or draft of the registrar mailed to the registered holder thereof at the holder's address as it appears on the books of the registrar as of the close of business on the 15th day of the immediately preceding month. . The Bonds will mature February 1 In the years and amounts as follows'. 1994 $ 65,040 2001 2402 $ 75,000 2407 $130,000 2013 $190,000 $ 85,000 2008 $140,000 2814 $155,000 1995 $110,000 1996 $124,000 2003 $ 95,040 2009 $145,440 2015 $165,000 2410 $150,000 201 S $180.000 1,000 997 $135,000 2004 1998 $170,400 2005 $105 $115,400 2011 $165,040 2017 $194,0©0 2012 $184,000 2818 $, 1999 $180,000 .2006 $120,400 2000 $ W.000 OPTIONAL REDEMPTION The Authority may elect on February 1, 2003, and on any day thereafter, to prepay Bonds due on or after February 1, 2004. Redemption may be in whole or in part and if in part, at the option of the Authority and in such order as the Authority shall determine and within a maturity by lot as selected by the registrar. All prepayments shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the Authority for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes, The proceeds will be used to finance redevelopment activities of the Authority in the City of Rosemount, including the relocation of local businesses and the construction of a municipal ice arena. In addition, proceeds will be used to finance a portion of the auditorium and banquet facilities being constructed as part of a new Community Center Complex which includes the municipal ice arena and a National Guard Armory. PKUIv� DRI GGS AND , MORGAN ST, PAUL 612 223 6645 (THU) 10.08' 92 16:08 %ST. 15 : 44/ N'0, 3360015-391 F. 11 % 17 TYPE OF PROPOSALS Proposals shall be for not less than $3,368,775 and accrued Interest on the total principal amount of the Bonds. proposals er'sshall ckeor accompanied niai�urety Bond ia Good n the amaze sitt of pS34 250, in the form of a certified or cos payable. to the order of the Authority. ifa check is used, it must accompany each proposal. If a Financial Surety Bond is used, t rna d be o proved by the Authan insurance or ty. licensed Such bond must be a bond in the State of Minnesota, p submitted to Springsted Incorporated prior to the opening ofanthe proposals. such Financial Surety Bond must identify each underwriter whose Deposit Is g Y 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 shalt be in integral multiples of 5/100 or 1/8 of 1%. gates must be in ascending order. Bonds of the same maturity shalt 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 Authority's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. 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 shalt 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 shell 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. 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. 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. ii - w Recommendations For Porn Authority of the City of Rosemount, Minnesota $3,425,000 General Obligation Municipal Building Bonds, Series 1992E Study No. R0704E3 SPRINGSTED Incorporated October 8, 1992 SPRINGSTED PUBLIC FINANCE ADVISORS Home Office 85 East Seventh Place Suite 100 Saint Paul, MN 55101-2143 (612) 223-3000 Fax: (612) 223-3002 October 8, 1992 Chair Person Edmund Dunn Board of Commissioners City of Rosemount Port Authority Mayor Edward B. McMenomy Members, City Council Mr. Stephen Jilk, Administrator Mr. Jeff May, Finance Director City of Rosemount 2875 -145th Street West Rosemount, MN 55068 120 South Sixth Street Suite 2507 Minneapolis, MN 55402-1800 (612) 333-9177 Fax: (612) 349-5230 16655 West Bluemound Road Suite 290 Brookfield, WI 53005-5935 (414) 782-8222 Fax: (414) 782-2904 6800 College Boulevard Suite 600 Overland Park, KS 66211-1533 (913) 345-8062 Fax: (913) 345.1770 1800K Street NW Suite 831 Washington, DC 20006-2200 (202) 466-3344 Fax: (202) 223-1362 Re: Recommendations for the Issuance of $3,425,000 General Obligation Municipal Building Bonds, Series 1992E We respectfully request your consideration of our recommendations for the issuance of these bonds according to the terms and conditions set forth in the attached Terms of Proposal. This issue is being sold concurrently with the City's $1,080,000 General Obligation Community Center Bonds, Series 1992C and $1,470,000 General Obligation Improvement Bonds, Series 1992D. The bonds are being issued pursuant to Minnesota Statutes, Chapters 469 and 475 and will be used to finance three components of the City's new Community Center/National Guard Armory Complex (the "Complex"), which will include a community center, a national guard armory and a municipal ice arena. Financing for each of these components has been structured separately and then combined into one single issue. The composition of each of the three components is shown in Appendix I. You will note in the community center improvement component of this issue, the City will be required to make a cash contribution of approximately $236,310 to pay for project costs. The following sections will describe each of the three components separately, followed by a discussion of items which apply to the issue as a whole. The Ice Arena Component This component of the issue will finance construction of a municipal ice arena. The cash flow schedule for the ice arena is shown in Appendix Il. The ice arena portion has been amortized over a term of 25 years and is structured around projected ice arena revenues as shown in the Port Authority of the City of Rosemount, Minnesota October 8, 1992 pro forma in Appendix III. The pro -forma is very similar to the schedules the City staff, City Council and the Authority has reviewed in the past. The pro -forma assumes a 3% annual increase in user rental rates over the life of the issue. Any deviation from the assumptions used to prepare the pro -forma projections may result in a cash shortfall, in which case the Authority will be required to: (i) increase user fees; (ii) supplement ice arena revenues with other City income, i.e. tax increment revenues and/or income from the City's Community Center banquet and auditorium facilities; or (3) levy a general ad valorem tax to ensure the repayment of this issue. Capitalized interest has been included in the ice arena portion to cover interest due from the dated date of the issue (November 1, 1992) through February 1, 1994. The ice arena is expected to be completed and open for operations in late 1993. Therefore, the first significant revenues from user fees will not be received until 1994. The August 1, 1993 and February 1, 1994 interest payments on the ice arena portion of the bonds will be made from capitalized interest. Thereafter, each August 1 interest payment and each subsequent February 1 principal and interest payment will be made from ice arena revenues generated the year prior to the February payment date. Relocation Component This component of the issue will be used to finance costs related to the relocation of existing businesses located adjacent to the site of the new Complex. The cash flow schedule for the relocation component of the issue is shown in Appendix IV. The relocation component has been amortized over a term of six years and is structured around tax increment revenues and lease payments the City is expected to continue to receive through levy year 1997 from the City's Rosemount Redevelopment District and Municipal Development District No. 1. The relocation portion of this issue is expected to be fully supported by the combination of tax increment revenues and lease payments. A general ad valorem tax levy is not anticipated to be necessary. In addition to the relocation component of this issue, the City's $1,100,000 General Obligation Tax Increment Bonds of 1988 are also being repaid from lease payments and tax increment revenues generated from within the City's Redevelopment District and Municipal Development District No. 1. The debt service on the 1988 Bonds is shown in Column 8 of Appendix IV. Column 9 shows the total debt which will be repaid from tax increment revenues and lease payments. Columns 10 and 11 show the projected tax increment income and lease income, with the combined total income shown in Column 12. Column 13 shows an annual surplus of revenues of approximately $230,400 after repayment of the relocation portion of this issue and the 1988 Bonds. The Community Center Component This component will finance a portion of the costs of construction of the auditorium and banquet facilities in the new Complex. The costs being funded by the lease component were not included in the City-wide referendum for the auditorium and banquet facility held on February 19, 1991. Minnesota Statutes, Chapter 489 gives the authority for the City's Port Authority to issue bonds for the . above redevelopment projects without a referendum. If the City fans to include monies in its operating levy for the debt service payments on this component, the Authority will be required to levy a general ad valorem tax for repayment of this component of the total issue. Page 2 Port Authority of the City of Rosemount, Minnesota October 8, 1992 The City has determined it will use two sources of revenue to support this community center component. First, the City has special legislation authorized under Laws of Minnesota 1990, Article 3, Section 59, Subdivision 1 to levy up to $95,000 annually for the new National Guard Armory. it has been determined at this time the City will need approximately $92,000 of this levy to repay the National Guard, leaving approximately $3,000 annually for repayment of debt on the community center component of this issue. In addition, municipalities in which an armory has been constructed are permitted to levy annually an amount not exceeding .00798% of taxable market value, for the purpose of financing construction of the armory. City staff has conservatively estimated future revenues which are expected to be available from these two tax levies as shown in Appendix V. This revenue stream was in tum used to structure the cash flow schedule for the community center portion of this issue in Appendix VL The special legislation and Minnesota Statues discussed in the prior paragraph are designated for the purpose of financing an armory. The auditorium and banquet facilities being constructed are being built and paid for and will be subsequently used by both the City and the National Guard. Because these facilities are in fact just as much a part of the Armory as the Community Center, the City's Bond Council has determined that the City may use the above- mentioned tax levies for this purpose Matters Concerning the Issuance of the Bonds Included in the principal amount of the issue is a provision for discount bidding in the amount of $58,225 or approximately $17 per $1,000 bonds. This discount provides the underwriters with all or part of their profit and/or working capital for purchasing the issue. It permits them to reoffer the bonds at or close to a par reoffering scale. We recommend the bonds maturing on or after February 1, 2004, be callable on February 1, 2003 and any day thereafter at a price of par and accrued interest. This call feature, representing $2,330,000, or approximately 68% of the bond issue, will permit a prepayment of those bonds should future market conditions warrant a refinancing of this issue. With the inclusion of the provision for discount bidding, this call feature should not impair the marketability of these bonds. The bonds will be dated November 1, 1992 and the first interest payment will be due August 1, 1993. Appendix VII shows the combined cash flow schedule for this issue with principal due February 1, 1994 through 2018. Repayment of the issue will require 25 annual levies which will be certified by the County Auditor at 105% of actual debt service in the resolution to be adopted at the time of award of the bonds. The Authority may annually reduce or abate the levies to the- extent ice arena revenues, tax increment revenues and other revenues are available to pay debt service on the bonds. We recommend an application be made to Moody's Investors Service of New York for a rating of.this issue. Representatives of the City and a representative of Springsted will be meeting with Moody's in New York on October 21, 1992 to present this issue and the City of Rosemount's general obligation community center and improvement bond issues. This issue and the City's general obligation bonds represent a substantial amount of new borrowing for the community and we feel it will be most effective for representatives of the City to meet face to face with Moody's to present all the necessary data and background on the issuance of these bonds. With this issue and the City's new general obligation debt, the City and the Authority will have issued a total of $8,395,000 of tax-exempt bonds in calendar year 1992. Since the City and the Authority will be issuing over $5,000,000 of tax-exempt bonds in calendar year 1992, the Page 3 Port Authority of the City of Rosemount, Minnesota. October 8, 1992 Authority will not be considered a "small issuer" for arbitrage purposes. However, the Authority may be exempt from the rebate requirements if the projects being funded by this issue can meet the two-year expenditure test, which is: at least 75% of the proceeds of each issue are used for construction and if 10% of the proceeds are spent within six months, 45% within 12 months, 75% within 18 months and 100% spent within two years. If it is reasonably required that a retainage be maintained to enforce the completion of a contract, up to 5% of the proceeds may be retained for an additional 12 months. Net proceeds subject to these expenditure tests include investment earnings on the original bond proceeds. (This is an absolute requirement, not reasonable expectations.) The Tax Reform Act restricts the ability of banks to deduct tax-exempt interest as carrying expense under certain circumstances in calculating the tax liability. Since the combined borrowing of the City and the Authority is not expected to exceed $10,000,000 in calendar year 1992, these bonds will be designated as "qualified obligations" which can be included in a bank's calculations of interest deduction. This designation will make the bonds more attractive to bidders. The U.S. Treasury has approved regulations which will significantly alter the ability of the issuers to utilize tax-exempt bonds or certificates to reimburse themselves for expenditures made prior to issuance. All tax-exempt bond issues settled after March 2, 1992 are subject to the new reimbursement regulations. This issue is subject to the reimbursement regulations. If any money is spent on project costs (with the exception of preliminary expenditures for professional fees and studies that do not exceed 20% of the issue price) prior to the receipt of the bond proceeds, at the time of the expenditure, the Authority must declare its intent to reimburse itself for the project costs from proceeds of the bonds. We recommend these bonds be offered for sale on Tuesday, October 27, 1992, with bids received at the offices of Springsted Incorporated at 11:00 A.M. Subsequent to the receipt of proposals, we will prepare a tabulation and present the results to the Board of Commissions at 7:30 P.M. that same evening for consideration of award. A representative of Springsted will attend your meeting to provide recommendations as to the acceptability of proposals received. Respectfully submitted, SPRINGSTED Incorporated 0 Page 4 City of Rosemount, Minnesota Summary of Port Authority Issue ICE ARENA COMPONENT Project Costs $2,127,000 Capitalized Interest 173,700 Costs of Issuance 19,760 Allowance for Discount 40,120 Less: Investment Earnings L�� Total Ice Arena Portion RELOCATION COMPONENT Project Costs 600,000 Costs of Issuance 6,020 Allowance for Discount 10,455 Less: Investment Earnings (1,47 Total Relocation Portion COMMUNITY CENTER IMPROVEMENT COMPONENT Auditorium/Banquet Costs 554,000 Site/Highway/Water Improvements & Furnishings 120,000 Less: City Cash Contribution (236.310)* Net Project Costs 437,690 Costs of Issuance 4,660 Allowance for Discount 7,650 Total Lease Back Portion TOTAL PORT AUTHORITY BOND ISSUE I •► Prepared 10/06/92 By SPRINGSTED Incorporated 450.000 ** $3,425,000 * The City may accrue investment earnings on the net bonds proceeds, which in turn can be used to reduce the cash contribution required by the City. ** Represents amount of bonding, including the State mandated 5% overlevy, which can be supported with a combination of two tax levies the City will levy annually for the armory, pursuant to Laws of Minnesota 1990, Article 3, Section 59, Subdivision 1 and Minnesota Statutes, Section 193.145. Page 5 City of Rosemount, Minnesota G.O. Municpal Building Bonds, Series 1992E Ice Arena Component APPENDDC 11 Prepared October 5, 1992 By SPRINOSTED Incorporated Dated: 11- 1-1992 Mature: 2- 1 First Interest: 8- 1.1993 Total Capital- Not Year of Year of Principal ized Levy 1054 Levy Mat. Principal Rates Interest 3 Interest interest Required of Total (1) (2) (3) (4) (5) (e) (7) (8) (9) 1992 1994 0 0.004 173,700 173,700 173,700 0 0 1993 1995 10,000 3.504 138,960 148,960 0 148,960 158,408 1994 1998 15,000 3.804 138,610 153,610 0 153,810 161,291 1995 1997 20,000 4.104 138,040 158,040 0 158,040 165,942 19% 1998 30,000 4.304 137,220 167,220 0 167,220 175,581 1997 1999 35,000 4.504 135,930 170,930 0 170,930 179,477 1998 2000 45,000 4.704 134,355 179,355 0 179,355 188,323 1999 2001 55,000 4,904 132,240 187,240 0 187,240 196,602 2000 2002 60,000 5.10% 129,545 189,545 0 189,545 199,022 2001 2003 70,000 5.254 126,485 196,485 0 198,485 206,309 2002 2004 80,000 5.404 122,810 202,810 0 202,810 212,951 2003 2005 90,000 5.554 118,490 208,490 0 208,490 218,915 2004 2008 95,000 5.704 '113,495 208,495 0 208,495 218,920 2005 2007 100,000 5.854 108,080 208,080 0 208,080 218,484 2006 2008 110,000 6.004 102,230 212,230 0 212,230 222,842 2007 2009 115,000 8.104 95,630 210,630 0 210,630 221,162 2008 2010 120,000 6.104 88,615 208,615 0 208,615 219,046 2009 2011 130,000 6.154 81,295 211,295 0 211,295 221,860 2010 2012 140,000 6.154 73,300 213,300 0 213,300 223,965 2011 2013 150,000 6.154 64,890 214,690 0 214,690 225,425 2012 2014 155,000 8.20% 55,465 210,465 0 210,465 220,988 2013 2015 165,000 6.204 45,855 210,855 0 210,855 221,396 2014 2016 180,000 8.254 35,625 215,625 0 215,625 226,408 2015 2017 190,000 6.254 24,375 214,375 0 214,375 225,094 2016 2018 200,000 6.254 12,500 212,500 0 212,500 223,125 TOTALS: 2,380,000 2,527,540 4,887,540 173,700 4,713,840 4,949,536 Bond Years: 41,800.00 Annual Interest: 2,527,540 Avg, Maturity: 17.71 Plus Discount: 40,120 Avg. Annual Rate: 6.0474 Net Interest: 2,567,660 T.I.C. Rate: 6.166% N.I.C. Rate: 6.1434 Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid say also vary. Page 6 City of Rosemount, Minnesota 3% Esc for all years, No Other Inc, No Depre $2,360,000 Bond Issue Ice Arena Pro -Forma Operating Year Income Escalation 1993 Yr 95-04 Yr 05+ Operating Income: Ice Time 3.00% 3.00% $22,010 Services 3.00% 3.00% 6,750 Total Operating Income $28,760 Other Income: 1994 $264,114 81,000 $345,114 1995 $272,037 83,430 $355,467 .•. $280,199 85,933 $366,131 1997 $288,604 88,511 $377,115 1998 $297,263 91,166 $388,429 Banquet Facility 0 0 0 0 0 0 Excess Tax Increment (Through 1999) 0 0 0 0 0 0 Cost Reduction Contribution 0 0 0 0 0 0 Building Depreciation 0.00% 0 0 0 0 0 -0 Total Other Income $0 $0 $0 $0 $0 $0 Total income $28,760 $345,114 $3551467 $366,131 $377,115 $388,429 Expenses Escalation Yr 95-04 Yr 05+ Operating Expense: Personnel 3.00% 3.00% 8,077 Insurance 3.00% 3.00% 833 Utilities 3.00% 3.00% 5,417 Gen & Admin 3.00% 3.00% 833 Total Operating Expense $15,160 Depreciation: Cost Life Building 0 50 0 Equipment 0 20 0 Total Depreciation $0 Total Operating Expense & Depre $15,160 Net Income Before Debt Service $13,600 Debt Service @ 105% e m Net Income Cumulative Depreciation Cumulative Profit/Loss $0 $13,600 $0 $13,600 $181,920 0 $0 $181,920 $163,194 $72,954 $90, 240 $0 $103,840 99,828 10,300 66,950 10,300 $187,378 0 $0 $187,378 $168,090 $156,224 $11,866 $0 $115,705 102,822 10,609 68,959 10,609 0 $0 $192,899 $173,133 $160,991 $12,141 $0 $127,846 105,907 10,927 71,027 10,927 $198,789 0 $0 $198,789 $178,326 $165,512 $12,815 $0 $140,661 109,084 11,255 73,158 11,255 $204,753 0 $0 $204,753 $183,676 $174,904 v Z $8,773 O S7 $0 $149,434 City of Rosemount, Minnesota 3% Esc for all years, No Other Inc, No Depre $2,360,000 Bond Issue ' Ice Arena Pro- Forma 0 0 Operating Year 0 0 0 Income Escalation 1999 2000 2001 2002 2003 2004 Yr 95-04 Yr 05+ 0 0 0 Building Depreciation 0.00% 0 Operating Income: 0 0 0 0 Total Other Income Ice Time 3.00% 3.00% $306,181 $315,366 $324,827 $334,572 $344,609 $354,947 Services 3.00% 3.00% 93,901 96,718 99,620 102,608 105,687 108,857 Total Operating Income $400,082 $412,084 $424,447 $437,180 $450,295 $463,804 Other Income: Banquet Facility 0 0 0 0 0 0 Excess Tax Increment (Through 1999) 0 0 0 0 0 0 Cost Reduction Contribution 0 0 0 0 0 0 Building Depreciation 0.00% 0 0 0 0 0 0 Total Other Income $0 $0 $0 $0 $0 $0 Total Income $400,082 $412,084 $424,447 $437,180 $450,295 $463,804 Expenses Escalation Yr 95-04 Yr 05+ Operating Expense: Personnel 3.00% 3.00% 112,357 115,728 119,199 122,775 126,459 130,252 Insurance 3.00% 3.00% 11,593 11,941 12,299 12,668 13,048 13,439 Utilities 3.00% 3.00% 75,353 77,613 79,942 82,340 84,810 87,355 Gen $ Admin 3.00% 3.00% 11,593 11,941 12,299 12,668 13,048 13,439 Total Operating Expense $210,895 $217,222 $223,739 $230,451 $237,364 $244,485 Depreciation: Cost life Building 0 50 0 Equipment 0 20 0 Total Depreciation $0 Total Operating Expense & Depre $210,895 Net Income Before Debt Service $189,187 Debt Service (P 105% Net Income o� Cumulative Depreciation Cumulative Profit/Loss $178,650 $10,537 $0 $159,971 0 0' $0 $217,222 $194,862 $187,212 $7,650 $0 $167,621 0 0 $0 $223,739 $200,708 $195,187 $5,521 $0 $173,142 0 0 $0 $230,451 $206,729 $197,416 $9,314 $0 $182,455 0 0 $0 $237,364 $212,931 $204,380 $8,551 0 0 $0 $244,485 $219,319 $210,683 $8.637 City of Rosemount, Minnesota Ice Arena Pro- Forma Income Escalation Yr 95-04 Yr 05+ Operating Income: KK Ice Time 3.00% 3.00% $365,596 Services 3.00% 3.00% 112,123 Total Operating Income $477,718 Other Income: Banquet Facility 0 Excess Tax Increment (Through 1999) 0 Cost Reduction Contribution 0 Building Depreciation 0.00% 0 Total Other Income $0 Total income $477,718 Expenses Escalation Operating Year Yr 95-04 Yr 05+ 0 Operating Expense: 2007 2008 Personnel 3.00% 3.00% 134,160 Insurance 3.00% 3.00% 13,842 Utilities 3.00% 3.00% 89,975 Gen & Admin 3.00% 3.00% 13,842 Total Operating Expense $506,812 $251,820 Depreciation: Cost Life 0 Building 0 50 0 Equipment 0 20 0 Total Depreciation 0 $0 Total Operating Expense & Depre $251,820 Net Income Before Debt Service $225,899 v Debt Service @ 105% $216,292 Net Income $9,607 $0 e n e Cumulative Depreciation Cumulative Profit/Loss 3% Esc for all years, No Other Inc, No Depre $2,360,000 Bond Issue 0 $0 $259,374 $232,676 $216,077 $16,599 $0 0 $267,156_ $239,656 $215,413 $24,243 $0 $209,249 $225,848 $250,091 0 Operating Year 0 0 0 2006 2007 2008 2009 2010 $376,563 $387,860 $399,496 $411,481 $423,825 115,487 118,951 122,520 126,195 129,981 $492,050 $506,812 $522,016 $537,676 $553,807 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $492,050 $506,812 $522,016 $537,676 $553,807 138,185 142,330 146,600 150,998 155,528 14,258 14,685 15,126 15,580 16,047 92,674 95,455 98,318 101,268 104,306 14,258 14,685 15,126 15,580 16,047 $259,374 $267,156 $275,170 $283,425 $291,928 0 $0 $259,374 $232,676 $216,077 $16,599 $0 0 $267,156_ $239,656 $215,413 $24,243 $0 $209,249 $225,848 $250,091 0 0 0 0 0 0 $0 $0 $0 $275,170 $283,425 $291,928 $246,846 $254,251 $261,878 $219,377 $217,479 $215,203 $27,469 $36,772 $46,676 $0 $0 $0 $277,560 $314,333 $361,008 City of Rosemount, Minnesota 3% Esc for all years, No Other Inc, No Depre $2,360,000 Bond Issue Ice Arena Pro -Forma Operating Year Income Escalation 2011 Yr 95-04 Yr 05+ 0 Operating Income: 0 Ice Time 3.00% 3.00% $436,540 Services 3.00% 3.00% 133,881 Total Operating Income $570,421 Other Income: Banquet Facility 0 Excess Tax Increment (Through 1999) 0 Cost Reduction Contribution 0 Building Depreciation 0.00% 0 Total Other Income $0 Total Income Expenses Escalation Yr 95-04 Yr 05+ Operating Expense: 2012 $449,636 137,897 $587,533 0 0 0 $0 $570,421 $587,533 Personnel 3.00% 3.00% 160,194 Insurance 3.00% 3.00% 16,528 Utilities 3.00% 3.00% 107,435 Gen & Admin 3.00% 3.00% 16,528 Total Operating Expense $300,686 Depreciation: Cost Building 0 Equipment 0 Total Depreciation Total Operating Expense & Depre Net Income Before Debt Service -v Debt Service @ 105% Net Income 0 Cumulative Depreciation Cumulative Profit/Loss Life 50 0 20 0 $0 =-:. $269,735 $217,662 $52,072 $0 $413,081 165,000 17,024 110,658 17,024 $309,707 0 0 $0 $309,707 $277,827 $219,445 $58,382 $0 $471,463 2013 $463,125 142,034 $605,159 0 0 0 $0 $605,159 169,950 17,535 113,978 17,535 0 0 $0 $318,998 $286,162 $220,581 $65,580 $0 $537,043 2014 $477,019 146,295 $623,314 0 0 0 $0 2015 $491,330 150,684 $642,014 0 0 0 $0 $506,070 155,204 $661,274 0 0 0 0 $0 $623,314 $642,014 $661,274 175,048 18,061 117,397 18,061 $328,568 0 0 $0 $328,568 $294,747 $215,943 $78,804 $0 $615,847 180,300 18,603 120,919 18,603 $338,425 0 0 $0 $338,425 $303,589 $216,027 $87,562' $0 $703,409 185,709 19,161 124,547 19,161 $348,578 0 0 $0 $348,578 $312,697 $220,500 $92,197 $0 $795,605 City of Rosemount, Minnesota 3% Esc for all years, No Other Inc, No Depre $2,360,000 Bond Issue Ice Arena Pro -!Forma Operating Year Income Escalation 2017 Yr 95-04 Yr 05+ Operating Income: Ice Time 3.00% 3.00% $521,252 Services 3.00% 3.00% 159,861 Total Operating Income $681,112 Other Income: Banquet Facility 0 Excess Tax Increment (Through 1999) 0 Cost Reduction Contribution 0 Building Depreciation 0.00% 0 Total Other Income $0 2018 $536,889 164,656 $701,546 0 0 0 0 $0 2019 $552,996 169,596 $722,592 0 0 $0 Total Income $681,112 $701,546 $722,592 Expenses Escalation Yr 95-04 Yr 05+ Operating Expense: Personnel 3.00% 3.00% 191,280 Insurance 3.00% 3.00% 19,736 Utilities 3.00% 3.00% 128,283 Gen & Admin 3.00% 3.00% 19,736 Total Operating Expense $359,035 Depreciation: Cost Life Building 0 50 0 Equipment 0 20 0 Total Depreciation $0 197,018 202,929 20,328 20,938 132,132 136,096 20,328 20,938 $369,806 $380,900 0 0 0 0 $0 $0 Total Operating Expense & Depre $359,035 $369,806 $380,900 Net Income Before Debt Service $322,077 $331,740 $341,692 -v Debt Service @ 105% $218,859 $216,563 $0 m m Net Income $103,218 $115,177 $341,692 j Cumulative Depreciation $0 $0 $0 Cumulative Profit/Loss $898,823 $1,014,001 $1,355,693 Prepared October 5, 1992 City of Rosemount, Minnesota By SPRINOSTED Incorporated O.O. Municipal Building Bonds, Series 1992E Relocation Component Dated: 11- 1-1992 Mature: 2- 1 F1 t Interest• 8- 1-1993 rs Total 1988 Projected Projected Principal 105% Bond Total Increment So Robt Total Year of Year Levy of Mat. Principal Rates Interest S Interest of Total Issue Debt Income Lease Inc Income (1) (2) (3) (4) (5) (6) (7) (a) (9) (10) (11) (12) 1992 1984 65,000 3.20% 30,681 95,681 100,465 171,735 272,200 405,000 96,000 501,000 1993 1995 95,000 3.50% 22,465 117,485 123,338 172,635 295,973 405,000 120,000 525,000 1994 1996 95,000 3.80% 19,140 114,140 119,847 172,515 292,362 405,000 120,000 525,000 1995 1997 105,000 4.10% 15,530 120,530 128,557 171,355 297,912 405,000 122,000 527,000 1996 1998 125,000 4.30% 11,225 136,225 143,036 174,135 317,171 405,000 144,000 549,000 1997 1999 130,000 4.50% 5,850 135,850 142,643 175,360 318,003 405,000 144,000 549,000 TOTALS: 615,000 104,891 719,891 755,886 1,037,735 1,793,621 2,430,000 746,000 3,176,000 Bond Years: 2,518.75 Annual Interest: 104,891 Avg. Maturity: 4.10 Plus Discount: 10,455 Avg. Annual Rate: 4.184% Net Interest: 115,346 T.I.C. Rate: 4.615% N.I.C. Rate: 4.579% Interest rates are estimates; changes may cause significant alterations of this schedule The actual underwriter's discount bid my also vary. m W N Annual Cumulative Surplus Surplus (13) (14) 228,800 228,800 229,027 457,827 232,838 690,465 229,088 919,553 231,829 1,151,382 230,997 1,362,379 'O M 0 APPENDIX V CITY OF ROSEMOUNT WORASEEBT FOR ESTIMATING ARMORY LEVY FIGURES Paae 13 ESTIMATED STATUS or YEAR ------ MARNET VALVE VALUE ART % ZNCR'SASE 1987 --------------- 196, 221, 300 ---------- FINAL --------- 1988 213,566,700 FINAL 8.8397% 1989 2611472,500 FINAL 22.4313% 1990 305,437,800 FXNAI, 16.8145% 1991 335,880,800 FINAL 9.9670% 1992 380,064,700 AS OF 7/92 13.1546% AVERAGE S YEAR GROTTA 14.2414% FIGURE TO USE FOR ESCALATING 3.0000% PERCENTAGE TO US$ FOR LEVY AMT 0.00798% LEVY ESCALATES FOR IST 10 YSARS•TMM LEVELS OFF ** ESTIMATED AldOUNT EXCESS OF AVAILABLE ESTIMATED STATUS OF ESTIMATED $95,000 FOR LEASE YEAR ------ MARKET VALUE VALUE AM LEVY AMOUNT + LEVY = PAYMENTS 1993 - - - - - - - - - - - - -- - 399,067,935 - - - - r - - - - - ESTIMATION ----------- 31.,846 + ..- - - r - 3,000 _ 34,846 1994 419,021,332 ESTIMATION 33,438 + 3,000 : 36,438 1995 439,972,398 ESTIMATION 35,110 + 31000 = 38,110 1996 461,971,018 ESTIMATION 36,865 + 3,000 s 39,865 1997 485,069,569 ESTIMATION 38,709 + 3,000 _ 41,709 1998 509,323,048 ESTIMATION 40,644 + 3,000 = 43,644 1999 534,789,200 ESTIMATION 42,676 + 3,000 45,676 2000 561,528,660 ESTIMATION 44,810 + 3,000 = 47,810 2001 589,605,093 ESTXMATION 47,050 + 3,000 = 30,050 2002 619,085,348 ESTIMATION 49,403 + 3,000 52,403 2003 650,039,615 ESTIMATION 49,403 + 3,000 _ 52,403 2004 682,541,596 ESTIMATION 49,403 + 3,000 _ 52,403 2005 716,668,676 ESTIMATION 49,403 + 3,000 52,403 2006 752,502,109 ESTIMATION 49,403 + 3,000 52,403 2007 790,127,215 ESTIMATION 49,403 + 3,000 = 52,403 2008 829,633,576 ESTIMATION 49,403 + 3,000 = .52,403 2009 871,115,254 ESTZ"TION 49,403 + 31000 52,403 2010 914,671,017 ESTiMATXON 49,403 + 3,000 • 52,403 2011 960,404,568 BSTnQTICEI 49,403 + 3,000 = $2,403 2012 1,008,424,796 EST33ULTION 49,403 + 3,000 = 52,403 2013 1,058,846,036 ESTIMATION 49,403 + 3,000 = 52,403 2014 1,111,788,338 ESTIMATION 49,403- + 3,000 * 52,403 2015 11167,377,755 LSTIMATIODI 49,403 + 3,000 = 52,403 2016 1,225,746,643 ESTIMATION 49,403 + 3,000 s S2,403 2017 1,287,033,975 ESTIMATION 49,403 + 3,000 = 52,403 2018 1,351,385,673 ESTIMATION 49,403 + 3,000 = 52,403 2019 1,418,954,957 ESTIMATION 49,403 + 3,000 = 52,403 2020 1,489,902,705 ESTIMATION 49,403 + 3,000 = 52,403 Paae 13 APPENOD(VI City of Rosemount, Minnesota Annual Interest: Prepared October 5, 1992 G.O. Municpal Building Bonds, Series 1992E By SPRINOSTED Incorporated Community Center Improvement Component N.I.C. Rate: 5.9284 Dated: are estimates; 11- 1-1992 significant alterations of this schedule. Mature: vary. 2- 1 First Interest: 8- 1.1993 Total Year of Year of Principal 105% Levy Mat. Principal Rates Interest & Interest of Total (1) (2) (3) (4) (5) (8) (7) 1992 1994 0 3.20% 31,281 31,261 32,824 1993 1995 5,000 3.50% 25,009 30,009 31,509 1994 1996 10,000 3.80% 24,834 34,834 38,576 1995 1997 10,000 4.10% 24,454 34,454 36,177 1998 1998 15,000 4.30% 24,044 39,044 40,996 1997 1999 15,000 4.50% 23,399 38,399 40,319 1988 2000 15,000 4.70% 22,724 37,724 39,610 1999 2001 20,000 4.90% 22,019 42,019 44,120 2000 2002 25,000 5.10% 21,039 46,039 48,341 2001 2003 25,000 5.25% 19,764 44,764 47,002 2002 2004 25,000 5.40% 18,451 43,451 45,624 2003 2005 25,000 5.55% 17,101 42,101 44,206 2004 2006 25,000 5.70% 15,713 40,713 42,749 2005 2007 30,000 5.85% 14,288 44,288 46,502 2006 2008 30,000 6.00% 12,533 42,533 44,660 2007 2009 30,000 8.10% 10,733 40,733 42,770 2008 2010 30,000 6.10% 8,903 38,903 40,848 2009 2011 35,000 6.15% 7,073 42,073 44,177 2010 2012 40,000 6.15% 4,920 44,920 47,166 2011 2013 40,000 6.15% 2,460 42,460 44,593 TOTALS: 450,000 350,722 800,722 840,759 Bond Years: 6,047.50 Annual Interest: 350,722 Avg. Maturity: 13.44 Plus Discount: 7,650 Avg. Annual Rate: 5.79% Net Interest: 358,372 T.I.C. Rata: 5.933% N.I.C. Rate: 5.9284 Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. Paae 14 APPENDD( VII City of Rosemount, Minnesota Prepared October 4, 1992 G.O. Municpal Building Bonds, Series 1992E By SPRINOSTED Incorporated Total Port Authority Issue Dated: 11- 1-1992 Mature. 2- 1 First Interest: 8- 1-1993 Bond Years: 50,388.25 Annual Interest: 2,983,154 Avg. Maturity: 14.71 Plus Discount: 58,225 Avg. Annual Rate: 5.923% Net Interest: 3,041,379 T.I.C. Rate: 6.028% N.I.C. Rate: 8.039% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. Paae 15 Total Capital- Net Year of Year of Principal ized Levy 105% Levy Mat. Principal Rates Interest 6 Interest Interest Required of Total (1) (2) (3) (4) (5) (6) (7) (6) (9) 1992 1994 65,000 3.20% 235,843 300,643 173,700 126,943 133,290 1993 1995 110,000 3.50% 188,434 296,434 0 296,434 311,258 1994 1996 120,000 3.80% 182,584 302,584 0 302,584 317,713 1995 1997 135,000 4.10% 178,024 313,024 0 313,024 328,675 1996 1988 170,000 4.30% 172,489 342,489 0 342,489 359,613 1997 1999 180,000 4.50% 165,179 345,179 0 345,179 362,438 1998 2000 60,000 4.70% 157,079 217,079 0 217,079 227,933 1999 2001 75,000 4.90% 154,259 229,259 0 228,259 240,722 2000 2002 85,000 5.10% 150,584 235,584 0 235,584 247,363 2001 2003 95,000 5.25% 148,249 241,249 0 241,249 253,311 2002 2004 105,000 5.40% 141,261 248,261 0 246,261 258,574 2003 2005 115,000 5.55% 135,591 250,591 0 250,591 263,121 2004 2006 120,000 5.70% 129,208 249,208 0 249,208 261,668 2005 2007 130,000 5.85% 122,368 252,368 0 252,368 264,986 2006 2008 140,000 6.00% 114,763 254,763 0 254,763 267,501 2007 2009 145,000 6.10% 108,363 251,363 0 251,363 263,931 2008 2010 150,000 6.10% 97,518 247,518 0 247,518 259,894 2009 2011 165,000 6.15% 88,368 253,368 0 253,368 268,036 2010 2012 180,000 6.15% 78,220 258,220 0 258,220 271,131 2011 2013 190,000 6.15% 67,150 257,150 0 257,150 270,008 2012 2014 155,000 6.20% 55,465 210,465 0 210,465. 220,988 2013 2015 165,000 8.20% 45,855 210,855 0 210,855 221,398 2014 2018 180,000 6.25% 35,825 215,825 0 215,625 228,406 2015 2017 190,000 8.25% 24,375 214,375 0 214,375 225,094 2016 2018 200,000 6.25% 12,500 212,500 0 212,500 223,125 TOTALS: 3,425,000 2,983,154 6,408,154 173,700 6,234,454 6,548,175 Bond Years: 50,388.25 Annual Interest: 2,983,154 Avg. Maturity: 14.71 Plus Discount: 58,225 Avg. Annual Rate: 5.923% Net Interest: 3,041,379 T.I.C. Rate: 6.028% N.I.C. Rate: 8.039% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. Paae 15 THE PORT AUTHORITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $3,425,000 PORT AUTHORITY OF THE CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION MUNICIPAL BUILDING BONDS, SERIES 1992E Proposals for the Bonds will be received on Tuesday, October 27, 1992, 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 at 7:30 P.M., Central Time, of the same day. DETAILS OF THE BONDS The Bonds will be dated November 1, 1992, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 1993. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Bonds will be issued in the denomination of $5,000 each, or in integral multiples thereof, as requested by the purchaser, and fully registered as to principal and interest. Principal will be payable at the main corporate office of the registrar and interest on each Bond will be payable by check or draft of the registrar mailed to the registered holder thereof at the holder's address as it appears on the books of the registrar as of the close of business on the 15th day of the immediately preceding month. The Bonds will mature February 1 in the years and amounts as follows: 1994 $ 65,000 2001 $ 75,000 2007 ' $130,000 2013 $190,000 1995 $110,000 2002 $ 85,000 2008 $140,000 2014 $155,000 1996 $120,000 2003 $ 95,000 2009 $145,000 2015 $165,000 1997 $135,000 2004 $105,000 2010 $150,000 2016 $180,000 1998 $170,000 2005 $115,000 2011 $165,000 2017 $190,000 1999 $180,000 2006 $120,000 2012 $180,000 2018 $200,000 2000 $ 60,000 OPTIONAL REDEMPTION The Authority may elect on February 1, 2003, and on any day thereafter, to prepay Bonds due on or after February 1, 2004. Redemption may be in whole or in part and if in part, at the option of the Authority and in such order as the Authority shall determine and within a maturity by lot as selected by the registrar. All prepayments shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the Authority for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds will be used to finance redevelopment activities of the Authority in the City of Rosemount, including the relocation of local businesses and the construction of a municipal ice arena. In addition, proceeds will be used to finance a portion of the auditorium and banquet facilities being constructed as part of a new Community Center Complex which includes the municipal ice arena and a National Guard Armory. Page 16 TYPE OF PROPOSALS Proposals shall be for not less than $3,366,775 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 $34,250, payable to the order of the Authority. 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 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 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 Authority's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. 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, 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. 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. Pao* 17 x4zrE 77h 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 Authority 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, which opinion will be printed on the Bonds, and of customary dosing 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. 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 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 Authority with respect to the Bonds, as that term is defined in Rule 1 Sc2-12. 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 150 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 October 13, 1992 BY ORDER OF THE PORT AUTHORITY /s/ Susan M. Walsh Executive Secretary paha 18