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HomeMy WebLinkAbout2. 1992 Bond Issue - Authorizing Issuance & Setting Bond Sale (1992C)EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: October 13, 1992 AGENDA ITEM: 1992 Bond Issue - Authorizing AGENDA SECTION: Issuance and Setting Bond Sale(1992C) New Business PREPARED BY: AGENDA NO. 0 Jeff May, Finance Director ATTACHMENTS: Memo from 10/6 Meeting, Council AP V BY: Resolution, Springsted Recommendations IV v This item is on the agenda for your consideration in authorizing the issuance and setting the sale of General Obligation Community Center Bonds, Series 1992C. These bonds are for the portion of the National Guard Armory upgrades to the Banquet Facility and the Theatre that were approved by referendum approval in February of 1991. 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 City Council at 8:00 P.M., Central Time, of the same day. Settlement of the Bonds willoccurwithin 40 days following the date of the award. Also, Council must take action to authorize the use of reserves for the buydown amount needed for the Port Authority issue. This is discussed in the attached memo from the 10/6 meeting. The final amount that is needed is $236,310, not the $300,000 to $400,000 that was addressed in the memo. We are proposing to use a combination of the Paid -Up Debt Sery Bond Fund($36,310)_and the 5 -Year CIP Program Fund($200,000). RECOMMENDED ACTION: Motion to authorize the transfer of funds for the buydown of the Port Authority issue, Series 1992E: from the Paid -Up Debt Sery Bond Fund the amount of $36,310 and from the CIP Fund the amount of $200,000. Motion to adopt A RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF $1,080,000 GENERAL OBLIGATION COMMUNITY CENTER BONDS, SERIES 1992C. COUNCIL ACTION: �iiy of (Rosemount - PHONE (612) 423.4411 2675 - 145th Street West. Rosemount, Minnesota MAYOR FAX (612) 423.5203 Mailing Address: Edward S. McMenomy P.O. Box 510, Rosemount, Minnesota 55068.0510 COUNCILMEMBERS Sheila Kiessen James (Rets) Steals Harry Willcox Dennis Wippermann DATE: October 1 1992 ADMINISTRATOR � Stephan Jilk TO: Mayor McMenomy Council Members Klassen, Staats, Willcox & Wippermann FROM: Jeff May, Finance Director SUBJECT: Upcoming Bond Issues As explained in the accompanying green sheet, this matter pertains to the issues that are confronting us as we are preparing to issue debt for a number of projects, most notably the National Guard Armory and all of its enhancements. The debt will be issued in three separate issues, two issued by the City and one issued through the Port Authority. The three issues are as follows: 1) General Obligation Community Center Bonds, Series 19920 2) General Obligation Improvement Bonds, Series 1992D 3) General Obligation Municipal Building Bonds, Series 1992E Issues (1) & (2) will be issued by the City and (3) will be issued by the Port Authority. The Series 1992D issue is for public improvement projects. This is a fairly straightforward issue which consists of the following projects: (1) Project 232 - O'Leary's Hills 5th Addition; (2) Project 233 — Section 31 Trunk Sanitary Sewer Improvements Project; (3) Project 234 Shannon Hills 4th Addition; and (4) Project 237 - National Guard Armory Water Improvements Project. All four of these projects qualify as statute 429 projects, which means that at least 20% of the total project costs will be assessed. The balance of the amounts to be financed will be recovered through the core funds. The complexities of the other two issues, the Series 1992C and the Series 1992E issues, are the driving reasons behind the delays in the requests for authorization for issuance for these bonds. Originally, the authorization for issuance was scheduled for September 29th. It was then pushed back to October 6th, and has now been pushed back to October 13th. Series 1992C is the debt to be issued for the enhancements to the banquet facility and the theatre for the Armory. This funding was approved by a referendum vote in February of 1991. In itself, this would be a fairly routine issue that would be recovered through levies. As you are all aware, the bids for this project came in significantly higher than anticipated, some (Sverylkings Coming up RosemounlY t= rKVCtltl pBDl� Page 2 $554,000 higher. This problem was dealt with by issuing the cost overruns as part of the Port Authority debt, Series 1992E. The Port Authority would then lease back to the City the two facilities and the City would make those lease payments to the Port Authority through the excess funds available from the two special Armory levies available. These two levies, one enacted by State special legislation for $95,000 a year and the other through an existing statute based on a percentage of the City's total valuation(approximately $30,000 for 1992), are primarily in place to make the City's 12.5%- portion 2.5%portion of the basic Armory project being funded through the National Guard. Because of the lower bids received on the basic Armory portion of the project, only about $90,000 will be needed for our annual payment to the National Guard. This frees up approximately $35,000 to be utilized by the City to make the lease payments to the Port Authority for that portion of the Series 1992E issue. The only problem is, that after adding issuance and discount costs and using a conservative interest rate, the $35,000 will not be sufficient to cover those payments. Further compounding this is the fact that we cannot include as part of our regular budget or tax levy an amount to include for lease payments to the Port Authority and still issue the debt as General Obligation debt. Therefore, we must buy down or put cash up front to reduce the $554,000 to an amount that can be leased back at the $35,000 a year. We are estimating that this buy down amount will be between $50,000 and $150,000. The other two portions of the Series 1992E issue are for the relocations of the businesses along Highway 3 that are adjacent to the Armory site and for the construction of a multipurpose arena. The relocation debt amount will be repaid through tax increment dollars and there seems to be no problems with this. The multipurpose arena debt will be repaid through revenues from the operations of the facility. Here again, there seems to be no problems with this part of the debt issue. The last area of concern regards an amount of $253,000 that was supposed to be included by the National Guard as part of their debt issue that we would have repaid through those two Armory levies. This amount included costs for site improvements, furnishings, the city share of the Highway 3 improvements and the city share of the water utility improvements regarding the Armory. Due to an oversight, the National Guard did not include this amount in with their bond bids and thus, we will have to fund these dollars. We will not be able to issue debt for this amount for the same reasons as explained in regards to the $554,000 cost overruns on the Community Center project. Therefore, we will have to fund this amount upfront as well. Page 3 This being the case, we will need to fund somewhere between $300,000 and $400,000 from cash reserves of the City -The attached schedules, run by Springsteds(DRAFT ONLY), show the figure to be $408,620. We are working with different figures and feel that this draft number will be able to be reduced by a fairly significant amount. By Tuesday night, we should have some different options as to where these funds may be drawn from. The bottom line is that we have approved the contract and cannot stop the project now. Therefore, we must find a way to make this work. I would like to make one that is regarding our bon by Moody's via telephone them for rating. Because it is the recommendation consultants, that we set with Moody's to give them project. Dan O'Neill, ou in October for another or and felt that it may be a interview with Moody's du assist us in our presenta to at SDrinasteds on this .ast comment about these bond issues and I rating. Normally, we are interviewed .n regards to bond issues placed before of the complexity of the Armory issues, )f Springsteds, our financial ip a formal person to person interview a total presentation of the Armory consultant will be in New York later fanization's presentation before Moody's >propriate to try and arrange an .ing that week so he would be present to :ion. All of the people we have talked matter concur that it would be to our great advantage to be able to explain, in person, the Armory project and the great impact it will have on the City of Rosemount. We would like to discuss your feelings on this at the Council meeting Tuesday night as well. If you have any questions before the meeting, do not hesitate to call Steve or myself so we can have discussion go as smoothly as possible on Tuesday night. FROM BRIGGS AND MORGAN ST, PAUL 612 223 6645 (FRI) 10, 09' 92 08:28 /ST, 08:27/ NO, 3360015-402 P, 2 CITY OF ROBF. X0UNT DAKOTA COUNTY, XMWESOTA RESOLUTION 1992 A RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTXATED SALE OF $1,080,000 GENERAL OBLIGATION COMMUNITY CENTER, BONDS] SERIES 1992C WHEREAS, the City Council of the City of Rosemount, Minnesota, has heretofore determined that it is necessary and expedient to issue its $1,080,000 General Obligation Community Center Bonds, Series 19920 (the "Bonds") to finance the acquisition and betterment of a community auditorium and banquet facility within the City; and WHEREAS, the city has retained Springsted Incorporated, in Saint Paul, Minnesota ("Springsted"), as its independent financial advisor and is therefore authorized to sell these obligations by a competitive negotiated sale in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount, Minnesota, as follows: 1. Authorization: Findings. The City Council hereby authorizes Springsted to solicit bids for the competitive negotiated sale of the Bonds. 2. Meeting; Bid Opening. This City council shall. Meet at the time and place specified in the Terms of proposal attached hereto as Exhibit A for the purpose of considering sealed bids for, and awarding the sale of, the Bonds. The Administrator, or his designee, shall open bids at the time and place specified in such Terms of Proposal. 3. Terms of Proposal. The terms and conditions of the Bonds and the negotiation thereof are fully set forth in the "Terms of Proposal" attached hereto as Exhibit A and hereby approved and made a part hereof. 4. official Statement. In connection with said competitive negotiated sale, the Administrator 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. 226892 FRO14 BRIGGS AND MORGAN ST, PAUL 612 223 6645 (THU) 10, 03' 92 16:04 /ST, 15:44/ NO, 3360015-391 P. 4/17 ADOPTED this 13th day of october, 1992. ATTEST: Susan M. Walsh, City Clerk mf Motion by: Voted in favor: Voted Against: 226892 2 E.B. McMenomy, Mayor Seconded by: FROM BRIGGS AND MORGAN ST, PAUL 612 223 6645 (THU) 10, 08' 92 16:05 /ST, 15:44/' N0, 3360015-391 P, 5/17 Exhibit A THE CITY HAS AUTHORIZED SPRINGSTEO INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING 13ASIS: TERMS OF PROPOSAL $1,080,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION COMMUNITY CENTER BONDS, SERIES 1992C Proposals for the Bonds will be received by the City Administrator or his designee on Tuesday, October 27, 1992, until 11:00 A.M., Central Time, at the offices of Springsted Incorporated, 65 East Seventh Place, Suite 140, 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 6:00 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 $6,400 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 $20,000 1999 $40,000 2004 $50,000 2009 $70,000 1995 $35,000 2000 $45,000 2005 $55,000 2010 $75,000 1996 $35,000 2001 $45,000 2006 $60,000 2011 $80,000 1997 $40,000 2002 $45,000 2007 $60,000 2012 $80,000 1998 $40,400 2003 $$0,000 2408 $65.000 2013 , $90,000 OPTIONAL REDEMPTION The City 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, apt the option of the City and In auch order as the City 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. SECURRY 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. The proceeds will be used to finance the acquisition and betterment of a community auditorium and banquet facility, TYPE OF PROPOSALS Proposals shall be for not less than $1,065,000 and accrued interest on the total principal amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ('Deposit) in • i±ROh BRIGGS AND MORGAN ST, FAUN 612 223 6645 (THU)10, 08' 92 16:05 /ST, 15:44, NO, 3360015-391 P. 5/17 the form of a oertfied or cashier's check or a Financial Surety Bond In the amount of $10,800, payable to the order of the City. K a check is used, it must accompany each proposal. K a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in tete 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. K 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 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. .BOND INSURANCE AT PURCHASER'S OPTION J 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. 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. 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 shalt be paid by the purchaser. • FROM', BRIGGS AND MORGAN ST, PAUL 612 223 6645 (THU) 10.08' 92 16:06 /ST, 15:44i" NO, 33600 15-39 1 P. 7/17 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 haul and Minneapolis, Minnesota, which opinion will be printed on the Bonds, 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 12:80 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. 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) 223-3010. 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 15c212. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 50 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated October 13, 1992 BY ORDER OF THE CITY COUNCIL /s/ Susan M. Walsh Clerk 4F } Im Recommendations For City of Rosemount, Minnesota $1,080,000 General Obligation Community Center Bonds, Series 1992C $1,470,000 General Obligation Improvement Bonds, Series 1992D Study No. R0704V2F3 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 Mayor Edward B. McMenomy Members, City Council Mr. Stephan 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: $1,080,000 General Obligation Community Center Bonds, Series 1992C $1,470,000 General Obligation Improvement Bonds, Series 1992D 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 proposed 'Terms of Proposals." Each issue will be discussed separately, with items common to both to follow. These issues are being sold concurrently with the City of Rosemount Port Authority's $3,425,000 General Obligation Municipal Building Bonds, Series 1992E. $1,080,000 General Obligation Community Center Bonds, Series 1992C These bonds are being issued pursuant to Minnesota Statutes, Chapter 475, and two referendums authorized by City voters at an election held February 19, 1991. City voters authorized $440,000 of bonds for the acquisition and betterment of a community auditorium and $625,000 of bonds for the acquisition and betterment of a community banquet facility, by votes of 580 (yes) to 476 (no) and 539 (yes) to 518 (no), respectively. We are recommending the City add to the total voted authorization of $1,065,000 a bond discount totaling $15,000, which represents approximately $14 per $1,000 of bonds, to be used for discount bidding purposes. This discount provides the underwriter with working capital and profit for purchasing the bonds and remarketing them to investors. Minnesota Statutes permits the addition of the discount over and above the voted authorization in an amount not to exceed 2% of the voted authorization. To the extent the underwriter does not use the full discount, any unused ,portion must be placed in the debt service fund and cannot be used for construction. The bonds will be dated November 1, 1992 and the first interest payment will be due August 1, 1993. Appendix I shows our recommended maturity schedule with principal due February 1, 1994 through 2013. Repayment of this issue will require 20 annual levies, averaging $97,870, City of Rosemount, Minnesota October 8, 1992 which will be certified to the County Auditor at 105% of actual debt service in the resolution to be adopted at the time of award of the bonds. The City has made a 1992 levy for the bonds in the amount of $98,354. The 1992 levy includes 15 months of interest from the dated date of the issue (November 1, 1992) through February 1, 1994. Subsequent levies will be for only 12 months of principal and interest requirements. Each levy is expected to be sufficient to pay the August 1 interest payment due in the year of collection, and the following February 1 payment of principal and interest. This cycle will continue for the life of the issue. We recommend the bonds maturing on or after February 1, 2003 be callable on February 1, 2004, and any day thereafter, at a price of par and accrued interest. This call feature, representing $685,000, or approximately 63% 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. $1,470,000 General Obligation Improvement Bonds, Series 1992D The improvement bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475, with proceeds to be used to finance four improvement projects within the City. The composition of the issue is shown in Appendix II. You will note the City is contributing $93,095 in cash from its Water Core Funds and $57,000 in cash from its Sewer Core Funds to reduce the total amount of borrowing. These bonds will be general obligations of the City for which it pledges 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. Appendix III is the projection of assessment income. Special assessments totaling an estimated $1,072,250 of principal are expected to be filed on or before October 1, 1993, for first collection in 1994. The assessments will be spread over ten years, requiring equal annual payments of principal with interest charged on the unpaid balance at a rate of approximately 2.0% over the expected net interest rate on the bonds. We have assumed a rate of 6.95% for the projection of assessment income. We have not made any projections of prepayments or delinquencies and are assuming for all structuring purposes that assessments will be collected as scheduled. Appendix IV is the recommended cash flow for the bond issue. The bond issue has been structured around the projected assessment income (Column 10) as developed in Appendix 111 The bonds will be dated November 1, 1992, and will mature each February 1 from 1995 through 2004. Columns 1 through 6 of Appendix IV show the years and amounts of principal and estimated interest due and payable on these bonds. Capitalized interest in the amount of $85,845, shown in Column 7, has been included in the issue to cover interest due from the dated date of the bonds to February 1, 1994. Column 8 shows the net levy required to pay 100% of debt service and Column 9 shows the 105% levy requirement as set forth by State statute. You will recall the 5% overlevy is a protection to the bondholder and to the City in the event 100% of the expected revenues are not received. Column 10 shows the projection of assessment income from Appendix III and Columns 11 and 12 show the projected annual contributions from the City's Storm Core Fund and Sewer Core Fund which will be made over the life of the issue to fund Projects #232 and #233, respectively. Column 13 shows the combined income from Columns 10, 11 and 12. Column 14 shows the net levy requirement which represents the City's share of costs of these improvement projects. However, if the City collects 100% of the assessments as projected, no tax levy will be required because the total projected income in Column 13 exceeds the net debt service requirements in Column 8. Page 2 City of Rosemount, Minnesota October 8, 1992 The August 1, 1993 and February 1, 1994 interest payments on the bonds will be made from capitalized interest. Thereafter, each August 1 interest payment and the following February 1 principal and interest payment is expected to be payable from assessment income and Storm and Sewer Core Funds. As with all improvement issues, the timing of principal repayments assumes that assessments will be filed in the years and amounts estimated.. Any deviation from these assumptions may result in a cash shortfall. Included in the principal amount of the issue is a provision for discount bidding in the amount of $14,700, representing approximately $10 per bond. We recommend the bonds maturing on or after February 1, 2002 be callable on February 1, 2001, and any day thereafter, at a price of par and accrued interest. This call feature, representing $435,000, or approximately 29% of the bond issue, will permit a prepayment of those bonds should substantial prepayments of assessments be received or if 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. Common To Both Issues As with all issues of the City, we recommend an application be made to Moody's Investors Service of New York for a rating of these issues. Representatives of the City and a representative of Springsted Incorporated will be meeting with Moody's in New York on October 21, 1992 to present these issues and the City of Rosemount Port Authority bonds. These issues and the Port Authority 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. In addition to these issues, the City has already issued $2,420,000 of tax-exempt bonds in calendar year 1992. With the further addition of the Port Authority bonds, the City will be issuing over $5,000,000 of tax-exempt bonds in 1992 and thus will not be considered a "small issuer" for arbitrage purposes. However, the City may be exempt from the rebate requirements if the projects being funded by these issues 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 of 1986 restricts the ability of banks to deduct tax-exempt interest as carrying expense under certain circumstances in calculating the tax liability. Since the City does not expect to issue more than $10,000,000 of tax-exempt obligations 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. Both of these issues are 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 Page 3 City of Rosemount, Minnesota October 8, 1992 to the receipt of the bond proceeds, at the time of the expenditure, the City 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 receipt of the proposals, we will prepare a tabulation and present the results at the special City Council meeting at 8:00 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 ✓ sms Page 4 APPENDDC t City of Rosemount, Minnesota Prepared September 28, 1992 G.O. Community Center Bonds, Series 1992C By SPRINGSTED Incorporated Dated: 11- 1-1992 Mature: 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) (6) (7) 1992 1994 20,000 3.20% 72,998 92,998 97,648 1993 1995 35,000 3.50% 57,758- 92,758 97,396 1994 1996 35,000 3.80% 56,533 91,533 96,110 1995 1997 40,000 4.10% 55,203 95,203 99,963 1996 1998 40,000 4.30% 53,563 93,563 98,241 1997 1999 40,000 4.50% 51,843 91,843 96,435 1998 2000 45,000 4.70% 50,043 95,043 99,795- 9,7951999 1999 2001 45,000 4.90% 47,928 92,928 97,574 2000 2002 45,000 5.10% 45,723 90,723 95,259 2001 2003 50,000 5.25% 43,428 93,428 98,099 2002 2004 50,000 5.40% 40,803 90,803 95,343 2003 2005 55,000 5.55% 38,103 93,103 97,758 2004 2006 60,000 5.70% 35,050 95,050 99,803 2005 2007 60,000 5.85% 31,630 91,630 96,212 2006 2008 65,000 6.00% 28,120 93,120 97,776 2007 2009 70,000 6.10% 24,220 94,220 98,931 2008 2010 75,000 6.10% 19,950 94,950 99,698 2009 2011 80,000 6.15% 15,375 95,375 100,144 2010 2012 80,000 6.15% 10,455 90,455 94,978 2011 2013 90,000 6.15% 5,535 95,535 100,312 TOTALS: 1,080,000 784,261 1,864,261 1,957,475 Bond Years: 13,605.00 Annual Interest: 784,261 Avg. Maturity: 12.60 Plus Discount: 15,000 Avg. Annual Rate: 5.765% Net Interest: 799,261 T.I.C. Rate: 5.861% N.I.C. Rate: 5.875% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. Pomp 5 City of Rosemount, Minnesota General Obligation Improvement Bonds, Series 19WD Prepared 09/28/92 By SPPoNGSTED Incorporated Project Project Costs* Less: Water Core Funds Less: Sewer Care Funds Plus: Costs of Issuance Plus: Discount Plus ............................:. Capitalized Interest Net Costs'; Amount of td be> Project Financed< Assessments Notes 232 - O'Leary's Hills $672,000 $7,000 $8,379 $7,203 $42,111 $722,693, $614,693 The City will contribute $108,000 from 5th Addition the Storm Core Fund over the fife of the issue. 233 - Section 31 Trunk 426,000 50,000 4,788 4,116 23,816 4013,720 115,720 The City will contribute $293,000 from Sanitary Sewer the Sewer Core Fund over the fife of the issue. 234 - Shannon Hills 220,000 2,736 2,352 13,927 239,015: 239,015 This project is 100% assessed. 4th Addition 237 - National Guard 187,700 $93,095 1,197 1,029 5,991 ,.02,822; 102,822 Net costs are 100% assessed. Armory Water Project Subtotal $1,505,700 $93,095 $57,000 $17,100 $14,700 $85,845 Less: Investment Earnings Total Bond Issue * Includes construction, engineering, contingency, and administration costs. $1,072,250 NO kv. V M z v City of Rosemount, Minnesota G.O. Improvement Bonds, Series 1992D Filing Collect Year Year 1993 1994 1994 1995 1995 19% 19% 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 TOTALS PROJECTED ASSESSMENT INCOME O'Leary's Hills 5th Addition Filing Date: 10/ 1/1993 Interest Principal @ 6.950% Total 61,469 49,978a 111,447 61,469 38,449 99,918 61,469 34,177 95,646 61,469 29,905 91,374 61,469 25,633 87,102 61,469 21,361 82,830 61,469 17,089 78,558 61,469 12,816 74,285 61,469 8,544 70,013 61,472 4,272 65,744 614,693 242,224 856,917 Section 31 Trunk Santry. Sewer Filing Date: 10/ 1/1993 Interest Principal it 6.950% Total 11,572 10,070b 21,642 11,572 7,238 18,810 11,572 6,434 18,006 11,572 5,630 17,202 11,572 4,826 16,398 11,572 4,021 15,593 11,572 3,217 14,789 11,572 2,413 13,985 11,572 1,609 13,181 11,572 804 12,376 115,720 46,262 161,982 APPENDIX RI Prepared September 28, 1992 By SPRINGSTED Incorporated Page 1 of 2 Shannon Hills 4th Addition Filing Date: 10/ 1/1993 Interest Principal @ 6.950% Total 23,902 20,799c 44,701 23,902 14,950 38,852 23,902 13,289 37,191 23,902 11,628 35,530 23,902 9,967 33,869 23,902 8,306 32,208 23,902 6,644 30,546 23,902 4,983 28,885 23,902 3,322 27,224 23,897 1,661 25,558 239,015 95,549 334,564 a) Includes interest from filing b) Includes interest from filing c) Includes interest from filing date to 12/ 1/1994. date to 12/31/1994. date to 12/31/1994. Porto 7 City of Rosemount, Minnesota G.O. Improvement Bonds, Series 1992D Filing Collect Year Year 1993 1994 1994 1995 1995 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 TOTALS PROJECTED ASSESSMENT INCOME Nat'l Guard Armory Water Filing Date: 10/ 1/1993 67,089 Interest 107,225 Principal 0 6.950% Total 10,282 8,947a 19,229 10,282 6,432 16,714 10,282 5,717 15,999 10,282 5,002 15,284 10,282 4,288 14,570 10,282 3,573 13,855 10,282 2,859 13,141 10,282 2,144 12,426 10,282 1,429 11,711 10,284 715 10,999 102,822 41,106 143,928 a) Includes interest from filing date to 12/31/1994. - - - T 0 T A L . . . . . Principal Interest Total 107,225 89,794 197,019 107,225 67,089 174,294 107,225 59,617 166,842 107,225 52,165 159,390 107,225 44,714 151,939 107,225 37,261 144,486 107,225 29,809 137,034 107,225 22,356 129,581 107,225 14,904 122,129 107,225 7,452 114,677 1,072,250 425,141 1,497,391 Prepared September 28, 1992 By SPRINGSTED Incorporated Page 2 of 2 Paae 8 :ity of Rosemount, Minnesota ..0. Improvement Bonds, Series 1992D .ated: 11- 1-1992 lature: 2- 1 'first Interest: 8- 1.1993 'ear of Year of Levy Mat. Principal Rates (1) (2) (3) (4) 1992 1994 0 0.00% 1993 1995 165,000 3.50% 1994 1996 145,000 3.80% 1995 1997 145,000 4.10% 1996 1998 145,000 4.30% 1997 1999 145,000 4.50% 1998 2000 145,000 4.70% 1999 2001 145,000 4.90% 2000 2002 145,000 5.10% 2001 2003 145,000 5.25% 2002 2004 145,000 5.40% OTALS: 1,470,000 Prepared September 28, 1992 By SPRINOSTED Incorporated and Years: 9,832.50 Annual Interest: 472,232 Avg. Maturity: 6.69 Plus Discount: 14,700 ,vg. Annual Rate: 4.803% Net Interest: 486,932 .I.C. Rate: 4.949% N.I.C. Rate: 4.952% nterest rates are estimates; changes may cause significant alterations of this schedule. he actual underwriter's discount bid may also vary. Total Capital- Net Projected Storm Sewer Total Principal ized Levy 105% Assessment Core Core Total Net Annual Interest 3 Interest Interest Required of Total Income Fund• Fund Income Requirement Surplus (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) 83,435 83,435 85,845 0 0 0 0 0 0 0 2,410 66,748 231,748 0 231,748 243,335 198,903 10,800 29,300 239,003 4,332 0 60,973 205,973 0 205,973 216,272 175,868 10,800 29,300 215,968 304 0 55,463 200,463 0 200,463 210,486 168,316 10,800 29,300 208,416 2,070 0 49,518 194,518 0 194,518 204,244 160,763 10,800 29,300 200,863 3,381 0 43,283 188,283 0 188,283 197,697 153,210 10,800 29,300 193,310 4,387 0 36,758 181,758 0 181,758 190,846 145,658 10,800 29,300 185,758 5,088 0 29,943 174,943 0 174,943 183,690 138,106 10,800 29,300 178,206 5,484 0 22,838 167,838 0 167,838 176,230 130,553 10,800 29,300 170,653 5,577 0 15,443 160,443 0 160,443 168,465 123,001 10,800 29,300 163,101 5,364 0 7,830 152,830 0 152,830 160,472 115,450 10,800 29,300 155,550 4,922 0 472,232 1,942,232 85,845 1,858,797 1,951,737 1,509,828 108,000 293,000 1,910,828 40,909 and Years: 9,832.50 Annual Interest: 472,232 Avg. Maturity: 6.69 Plus Discount: 14,700 ,vg. Annual Rate: 4.803% Net Interest: 486,932 .I.C. Rate: 4.949% N.I.C. Rate: 4.952% nterest rates are estimates; changes may cause significant alterations of this schedule. he actual underwriter's discount bid may also vary. THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,080,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION COMMUNITY CENTER BONDS, SERIES 1992C Proposals for the Bonds will be received by the City Administrator or his designee 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 City Council at 8:00 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 $20,000 1999 $40,000 2004 $50,000 2009 $70,000 1995 $35,000 2000 $45,000 2005 $55,000 2010 $75,000 1996 $35,000 2001 $45,000 2006 $60,000 2011 $80,000 1997 $40,000 2002 $45,000 2007 $60,000 2012 $80,000 1998 $40,000 2003 $50,000 2008 $65,000 2013 $90,000 OPTIONAL REDEMPTION The City 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 City and in such order as the City 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 City 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 the acquisition and betterment of a community auditorium and banquet facility. TYPE OF PROPOSALS Proposals shall be for not less than $1,065,000 and accrued interest on the total principal amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit CDeposit") in Paoe 10 the form of a oerdfiied or cashier's check or a Financial Surety Bond in the amount of $10,800, 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 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. 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. 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. 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. Paoe 11 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, which opinion will be printed on the Bonds, 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. 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 50 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated October 13, 1992 BY ORDER OF THE CITY COUNCIL /s/ Susan M. Walsh Clerk Pane 12 THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,470,000 CRY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1992D Proposals for the Bonds will be received by the City Administrator or his designee 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 City Council at 8:00 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: 1995 $165,000 1999 $145,000 2002 $145,000 1996 $145,000 2000 $145,000 2003 $145,000 1997 $145,000 2001 $145,000 2004 $145,000 1998 $145,000 OPTIONAL REDEMPTION The City may elect on February 1, 2001, and on any day thereafter, to prepay Bonds due on or after February 1, 2002. Redemption may be in whole or in part and if in part, at the option of the City and in such order as the City 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 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 $1,455,300 and accrued interest on the total principal amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $14,700, Page 13 payable to the order of the City. K 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 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. 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. 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. 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. Dom-- -4 A 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, which opinion will be printed on the Bonds, 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. 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 60 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 13, 1992 BY ORDER OF THE CITY COUNCIL /s/ Susan M. Walsh Clerk Pane 15