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HomeMy WebLinkAbout4. Authorize Issuance and Bond Sale for $265, 000 General Obligation Improvements BondsEXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: October 22, 1991 AGENDA ITEM: 1991 Bond Issue - Authorizing AGENDA SECTION: Issuance and Setting Bond Sale New Business PREPARED BY: AGENDA NO. Jeff May, Finance Director ATTACHMENTS: Memorandum A OVE BY: Springsted Recommendations, Council Resolution This item is on the agenda for your consideration in authorizing_ the issuance and setting the sale of bonds for the Country Hill 4th Addition project. Bids will be opened 'Tuesday, November 19, 1991, at 12:00 P.M.-, Central Time, at the offices of Springsted Incorporated. The bids will be tabulated there, and then consideration for award of the Bonds will be by the City Council at 7:30 P.M., Central Time, of the same day. Settlement of the Bonds will occur within 40 days following the date of the award. RECOMMENDED ACTION: Motion to adopt a RESOLUTION AUTHORIZING THE NEGOTIATION OF $265,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1991B. COUNCIL ACTION: �iiy of (OLosemouni PHONE (612)423-4411 2875 - 145th Street West, Rosemount, Minnesota MAYOR FAX (612) 423-5203 Mailing Address: Vernon Napper P. O. Box 510, Rosemount, Minnesota 55068-0510 COUNCILMEMBERS Sheila Klassen John Oxborough Harry Willcox Dennis Wippermann DATE: October 8, 1991 ADMINISTRATOR Stephan Jlk TO: Mayor Napper Councilmembers Klassen, Oxborough, Willcox, and Wippermann FROM: Jeff May, Finance Director SUBJECT: Bond Issues Authorization At the Special Council Meeting scheduled for Tuesday, October 22, 1991, there will be on the agenda two bond issue items for your review and action. The first will be a resolution authorizing issuance and setting the bond sale for General Improvement Bonds Series 1991B. This bond issue will be for the Country Hills 4th Addition project. The second will be a resolution authorizing issuance and setting the bond sale for Equipment Certificates Series 1991C. This bond issue will be for the $200,500 in equipment certificates that were approved in the preliminary setting of the 1992 budget. The reason for setting the bond sale now is a matter of timing. If we adopt these resolutions on the 22nd, the sale will be able to take place on November 19, 1991, and we will be able to receive our proceeds sometime in early December. This will accomplish two things, the first being that the Country Hills project proceeds will be in hand to cover the costs up to the completion of the project. This means that we will not have to cover those costs with other funds until a future bond issue sometime next year. The second thing that will be accomplished is that the issuance of the equipment certificates will allow us to legally levy the $52,000(appproximately) which is part of our total levy. If we wait to do these issues, we will show a large deficit balance in the fund for the Country Hills 4th project at year end. Also, at some point in time before we approve our final levy, we must, at the minimum, authorize the issuance of the equipment certificates so the levy for the certificates can be done. Springsted, our financial consultant, feels that this is a workable time schedule, and one that will suit our needs very well. Also, right now is a good time, as far as the market goes, to issue bonds. If you have any questions on these matters, please do not hesitate to contact me prior to October 22nd. Hopefully, this memo will prepare and inform you of these matters, and allow us to get any questions answered ahead of time. Thank you! 6very1htngs Cooming Up gosemounl.! CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 1991 A RESOLUTION AUTHORIZING THE NEGOTIATION OF $210,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 1991C WHEREAS, the City Council of the City of Rosemount, Minnesota, has heretofore determined that it is necessary and expedient to issue its $210,000 General Obligation Equipment Certificates of Indebtedness, (the "Certificates") Series 1991C to acquire equipment for City purposes; and WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 475.60, Subdivision 2, the City Council has the authority to negotiate the private sale of the Certificates without complying with public sale requirements. NOW, THEREFORE, BE IT RESOLVED,:by the City Council of the City of Rosemount, Minnesota, as follows: 1. The City Council does hereby authorize Springsted Incorporated in St. Paul, Minnesota, to act as its agent to solicit offers for the private sale of the Certificates, provided that no offer shall be deemed accepted until the City Council adopts a resolution accepting the offer for the Certificate. 2. In connection with said solicitation, the officers of the City are hereby authorized to cooperate with Springsted Incorporated in the preparation of an official statement or other offering materials for the Certificates. ADOPTED, this 22nd day of October, 1991. Vernon J. Napper, Mayor ATTEST: Susan M. Walsh, City Clerk Motion by: Second by: Voted in favor: Voted against• Recommendations For City of Rosemount, Minnesota $265,000 General Obligation Improvement Bonds, Series 1991 B $210,000 General Obligation Equipment Certificates of Indebtedness, Series 1991C Study No. 3939 SPRINGSTED Incorporated October 15, 1991 16655 West Bluemound Road Suite 290 Brookfield, WI 53005-5935 (414) 782-8222 Fax: (414) 782-2904 2739 Second Avenue S.E. Cedar Rapids, IA 52403-1434 (319)363-2221 Fax: (319) 363-6999 October 15, 1991 Mayor Vernon J. Napper Members, City Council Mr. Stephan Jilk, Administrator Mr. Jeff May, Finance Director City of Rosemount 2875 -145th Street West Rosemount, MN 55068 SPRINGSTED PUBLIC FINANCE -ADVISORS 85 East Seventh Place Suite 100 Saint Paul, MN 55101-2143 (612) 223-3000 Fax: (612) 223-3002 6800 College Boulevard Suite 600 Overland Park, KS 6621 1-1 533 (913) 345-8062 Fax: (913)345-1770 222 South Ninth Street Suite 2825 Minneapolis, MN 55402-3368 (612)333-9177 Fax: (612) 333-2363 Re: Recommendations for the Issuance of: $265,000 General Obligation Improvement Bonds, Series 1991 B and $210,000 General Obligation Equipment Certificates of Indebtedness, Series 1991 C We respectfully request your consideration of our recommendations for the issuance of these bonds and certificates according to the terms and conditions set forth in the attached proposed Terms of Proposal. Each issue will be discussed separately, with items common to both to follow. $265,000 General Obligation Improvement Bonds, Series 1991 B The proceeds of this issue will be used to finance public road and utility improvements to Country Hills 4th Addition. The composition of the issue is as follows: Construction Costs $192,212 Construction Engineering 19,387 Engineering Design 12,200 Administration 7,688 Contingency 13.000 Total Project Costs $244,487 Less: Water Core Funds (7,200) Plus: Capitalized Interest (to 2-1-93) 17,687 Costs of Issuance 10,985 Allowance for Discount Bidding 3,445 Less: Investment Earnings (4,404 Total Bond issue 265 000 Capitalized interest in the amount of $17,687 has been included in the issue to cover interest due from the dated date of the bonds to February 1, 1993. City of Rosemount, Minnesota October 15, 1991 Appendix I is the projection of assessment income. The assessment rolls are expected to be adopted 'on or before November 30, 1992, for first collection in 1993. The assessments will be spread over ten years, requiring equal annual payments of principal with interest on the unpaid balance at a rate of approximately 2.0% over the expected net interest rate on the bonds. We have assumed an 8.10% for the projection of assessments. We have not made any projections of prepayments or delinquencies of special assessments and are assuming for all structuring purposes that assessments will be collected as scheduled. Appendix II 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 1. The bonds will be dated December 1, 1991, and will mature each February 1 from 1994 through 2003. Columns 1 through 6 show the years and amounts of principal and estimated interest due and payable on these bonds. Column 7 shows the capitalized interest, with Column 8 showing the net levy required to pay 100% of debt service. Column 9 shows the 105% overlevy 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 achieved. Column 10 shows the projection of assessment income from Appendix II and Column 11 shows the projected annual surplus of assessment income (Column 10 less Column 9). The August 1, 1992 and February 1, 1993 interest payments on the bonds will be made from capitalized interest. Thereafter, each August 1 interest payment and each February 1 principal and interest payment is expected to be payable from assessment income. A tax levy is not expected to be necessary. 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 $3,445. 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. The discount, representing $13 per bond, is a successful marketing tool the City has used in all past bond issues and we recommend its continued use here. We recommend the bonds maturing on or after February 1, 2000, be callable on February 1, 1999, and any day thereafter at a price of par and accrued interest. This call feature, representing $100,000, or approximately 38% 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. $210,000 General Obligation Equipment Certificates of Indebtedness, Series 1991 C Proceeds of the certificates will finance the purchase of various equipment to be used by the City. The composition of this issue is as follows: Page 2 City of Rosemount, Minnesota October 15,1991 Hose Truck $ 40,000 Lawn Mower 12,000 Passenger Van 17,000 Pickup Truck 17,000 Park Vacuum 25,000 Police Squad Cars (2) 28,000 1/2 Ton Pickup Truck 14,000 3/4 Ton (4x4) Pickup Truck 18,000 Tamper 2,000 Paint Sprayer 2,500 Bob Cat Loader 25.000 Total Equipment $200,500 Plus: Costs of Issuance 10,975 Allowance for Discount Bidding 1,680 Less: Investment Earnings 3155 Total Bond Issue 210 000 The Equipment Certificates are being issued pursuant to Minnesota Statutes, Sections 410.32 and 412.301, which allow the City to issue certificates to purchase capital equipment without a referendum. Pursuant to Section 412.301, the City may issue equipment certificates in an amount equal to 0.25% of the market value of the taxable property in the City without publication of a resolution determining to issue them, and without being subject to a reverse referendum. The City's current established market value is $318,233,500; 0.25% of which is $795,583. The amount of the Certificates is well within this limit. Included in the Certificates is an allowance for an underwriter's discount in the amount of $1,680, or $8/$1,000 bond. The certificates will be repaid in five years in equal annual installments of principal and interest from a tax levy. There is no other income source. Appendix III shows the repayment schedule for the certificates. Due to the rapid retirement of these certificates, it is our recommendation that the certificates not be subject to call so that maximum marketability is achieved. 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. We will provide Moody's with the necessary data upon which they will make their rating analysis and make the application on your behalf. We do not anticipate a change in the City's "A" rating from Moody's. These bonds are subject to federal arbitrage regulations; however, it is our understanding the City does not anticipate issuing more than $5,000,000 of tax-exempt bonds during 1991 and therefore can qualify as a small issuer, exempt from the reporting and rebate requirements. Also, the City may designate these bonds as "qualified bonds" under the Tax Reform Act of 1986, making the bonds more attractive to banks as investors in these bonds. You should be aware that the U.S. Treasury has proposed regulations which will significantly alter the ability of issuers to utilize tax-exempt bonds to reimburse themselves for expenditures made prior to issuance. While the proposed regulations have not yet been adopted, they will govern bonds issued 30 days after the regulations are published unless the regulations are withdrawn or modified. We now anticipate publication after January 1, 1992. Page 3 City of Rosemount, Minnesota October 15, 1991 There are three major areas of the proposed regulations which set forth the following restrictive provisions. 1. They prohibit bonds issued after the effective date from being used to reimburse expenditures made before two years prior to the effective date or to reimburse expenditures paid on projects which have been in service for more than one year upon the date of issuance. 2. They restrict the conditions under which bonds issued after the effective date may be used to reimburse expenditures made within two years but before the effective date. There must be 'objective evidence" that at the time the expenditures were made the issuer intended to reimburse itself from the proceeds of a borrowing and that the expectation was reasonable based on historical finance practices. The reimbursement must occur within one year of the expenditure or within one year from the time a property or project was placed in service, if later. 3. They prohibit reimbursement from bond proceeds of expenditures made after the effective date unless: a) the issuer declares in the public record official intent to reimburse expenditures with bond proceeds and describes the nature of the borrowing, the project for which the expenditures would be made, and identifies the source of debt service funds; b) a reimbursement is made before the later of one year after the date the expenditure was made or one year after the date on which the project was placed in service; c) the expenditure was incurred with respect to a property or project which has a reasonably expected economic life of at least one year. If the expenditures representing preliminary expenditures for professional fees or studies, were not expected to exceed 10% of the total project costs at the time they were made, they are exempt from the time limitations but are not exempt from the declaration of intent. The 1991 Minnesota Legislature amended bond sale procedures to permit the non-public issuance of obligations if the issuer retains an independent financial advisor. Springsted remains a proponent of competitive bidding but sees some advantages to the new legislation. We recommend a competitive negotiated sale where all bidders reasonably expected to compete for an issue are notified of the pending sale and competitive bids are received but no legal advertisement is published. The issuer benefits from eliminating the publication costs and any risk of having an issue delayed due to the time required for publication, or the inadvertent failure of a legal notice to be published. In our ever changing industry published notices are no longer a critical source of information for bidders. Other than for publication you should see no change in your issuing procedures or in the bidding results. We recommend these bonds be offered for sale on Tuesday, November 19, with proposals received at the offices of Springsted Incorporated at 12:00 Noon. At that time, all proposals received will be opened and verified for accuracy, and a bid tabulation will be prepared for presentation to the Council for action at their regular meeting at 7:30 P.M. that same evening. A representative of Springsted Incorporated will attend your meeting to provide recommendations as to the acceptability of the proposals received. Respectfully submitted, c SPR I G TE'D Incorporated v rlw Page 4 APPENDIX I City of Rosemount, Minnesota Prepared October 16, 1991 G.O. Improvement Bonds, Series 1991B By SPRINGSTED Incorporated PROJECTED ASSESSMENT INCOME a) Includes interest from filing date to 12/31/1993. Page 5 Country Hills 4th Addition Filing Date: 11/30/1992 Filing Collect Interest Year Year Principal @ 8.100% Total 1992 1993 26,209 23,090a 49,299 1993 1994 26,209 19,106 45,315 1994 1995 26,209 16,983 43,192 1995 1996 26,209 14,860 41,069 1996 1997 26,209 12,737 38,946 1997 1998 26,209 10,614 36,823 1998 1999 26,209 8,491 34,700 1999 2000 26,209 6,368 32,577 2000 2001 26,209 4,245 30,454 2001 2002 26,204 2,123 28,327 TOTALS 262,085 118,617 380,702 a) Includes interest from filing date to 12/31/1993. Page 5 City of Rosemount, Minnesota G.O. Improvement Bonds, Series 19918 Country Hills Fourth Addition Dated: 12. 1-1991 Mature: 2- 1 First Interest: 8- 1-1992 Prepared October 16, 1991 By SPRINGSTED Incorporated Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. M i t•. .a m z v Total Capital- Net Projected Year of Year of Principal ized Levy 105% Assessment Annual Cumulative Levy Mat. Principal Rates Interest 8 Interest Interest Required of Total Income Surplus Surplus (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 1991 1993 0 0.00% 17,687 17,687 17,687 0 0 0 0 0 1992 1994 30,000 5.05% 15,160 45,160 0 45,160 47,418 49,299 1,881 1,881 1993 1995 30,000 5.20% 13,645 43,645 0 43,645 45,827 45,315 0 1,369 1994 1996 30,000 5.40% 12,085 42,065 0 42,085 44,189 43,192 0 372 1995 1997 25,000 5.55% 10,465 35,465 0 35,465 37,238 41,069 3,831 4,203 1996 1998 25,000 5.70% 9,077 34,077 0 34,077 35,781 38,946 - 3,165 7,368 1997 1999 25,000 5.85% 7,652 32,652 0 32,652 34,285 36,823 2,538 9,906 1998 2000 25,000 6.00% 6,189 31,189 0 31,189 32,748 34,700 1,952 11,858 1999 2001 25,000 6.15% 4,689 29,689 0 29,689 31,173 32,577 1,404 13,262 2000 2002 25,000 6.25% 3,151 28,151 0 28,151 29,559 30,454 895 14,157 2001 2003 25,000 6.35% 1,588 26,588 0 26,588 27,917 28,327 410 14,567 TOTALS: 265,000 101,388 366,388 17,687 348,701 366,135 380,702 Bond Years: 1,714.17 Annual Interest: 101,386 Avg. Maturity: 6.47 Plus Discount: 3,445 Avg. Annual Rate: 5.915% Net Interest: 104,833 T.I.C. Rate: 6.135% N.I.C. Rate: 6.116% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. M i t•. .a m z v City of Rosemount, Minnesota G.O. Equipment Certificates, Series 1991C Dated: 12- 1-1991 Mature: 12- 1 First Interest: 12- 1-1992 Year of Year of Levy Mat. (1) (2) 1991 1992 1992 1993 1993 1994 1994 1995 1995 1996 TOTALS: Principal Rates (3) (4) 40,000 4.50% 40,000 4.70% 40,000 4.90% 45,000 5.05% 45,000 5.20% 210,000 APPENDIX 111 Prepared October 8, 1991 By SPRINGSTED Incorporated Total 32,232 242,232 254,345 Bond Years: Principal 105% Interest & Interest of Total (5) (6) (7) 10,253 50,253 52,766 8,453 48,453 50,876 6,573 46,573 48,902 4,613 49,613 52,094 2,340 47,340 49,707 32,232 242,232 254,345 Bond Years: 645.00 Annual Interest: 32,232 Avg. Maturity: 3.07 Plus Discount: 1,680 Avg. Annual Rate: 4.997% Net Interest: 33,912 T.I.C. Rate: 5.258% N.I.C. Rate: 5.258% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. Page 7 THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON THEIR BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $265,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1991 B Proposals for the Certificates will be received by the City Administrator or his designee on Tuesday, November 19, 1991, until 12:00 Noon, 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 Certificates will be by the City Council at 7:30 P.M., Central Time, of the same day. DETAILS OF THE CERTIFICATES The Certificates will be dated December 1, 1991, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 1992. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Certificates 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 Certificate 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 Certificates will mature February 1 in the years and amounts as follows: 1994 $30,000 1998 $25,000 2001 $25,000 1995 $30,000 1999 $25,000 2002 $25,000 1996 $30,000 2000 $25,000 2003 $25,000 1997 $25,000 OPTIONAL REDEMPTION The City may elect on February 1, 1999, and on any day thereafter to prepay Bonds due on or after February 1, 2000. 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 a price of par plus accrued interest. SECURITY AND PURPOSE The Certificates 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 a street and utility improvement project within the City. TYPE OF PROPOSALS Proposals shall be for not less than $261,555 and accrued interest on the total principal amount of the Certificates. Proposals shall be accompanied by a Good Faith Deposit Page 8 ("Deposit") in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $2,650, 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 Certificates 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 Certificates is adjourned, recessed, or continued to another date without award of the Certificates having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 %. Rates must be in ascending order. Certificates of the same maturity shall bear a single rate from the date of the Certificates to the date of maturity. No conditional proposals will be accepted. AWARD The Certificates will be awarded on the basis of the lowest dollar interest cost to be determined by the deduction of the premium, if any, from, or the addition of any amount less than par, to the total dollar interest on the Certificates from their date to their final scheduled maturity. The City's computation of the total net dollar interest cost of each proposal, in accordance with customary practice, will be controlling. 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 Certificates qualify for assignment of CUSIP numbers such numbers will be printed on the Certificates, but neither the failure to print such numbers on any Certificate nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Certificates. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT Within 40 days following the date of their award, the Certificates 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 Certificates, and of customary closing papers, including a no -litigation certificate. On the date of settlement payment for the Certificates 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 Certificates shall have been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. Page:9 OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Certificates, 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 Certificates, together with any other information required by law, shall constitute a "Final Official Statement' of the City with respect to the Certificates, as that term is defined in Rule 15c2-12. By awarding the Certificates 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 Certificates are awarded 15 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 Certificates 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 Certificates 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 Certificates for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated October 22, 1991 BY ORDER OF THE CITY COUNCIL /s/ Stephan Jilk City Administrator Page 10 THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON THEIR BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $210,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 1991C Proposals for the Certificates will be received by the City Administrator or his designee on Tuesday, November 19, 1991, until 12:00 Noon, 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 Certificates will be by the City Council at 7:30 P.M., Central Time, of the same day. DETAILS OF THE CERTIFICATES The Certificates will be dated December 1, 1991, as the date of original issue, and will bear interest payable on June 1 and December 1 of each year, commencing December 1, 1992. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Certificates 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 Certificate 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 Certificates will mature December 1 in the years and amounts as follows: 1992 $40,000 1994 $40,000 1996 $45,000 1993 $40,000 1995 $45,000 OPTIONAL REDEMPTION The Certificates will not be subject to payment in advance of their respective stated maturity dates. SECURITY AND PURPOSE The Certificates 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 acquire equipment for City purposes. TYPE OF PROPOSALS Proposals shall be for not less than $208,320 and accrued interest on the total principal amount of the Certificates. 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 $2,100, 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 Page 11 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 Certificates 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 Certificates is adjourned, recessed, or continued to another date without award of the Certificates having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 %. Rates must be in ascending order. Certificates of the same maturity shall bear a single rate from the date of the Certificates to the date of maturity. No conditional proposals will be accepted. AWARD The Certificates will be awarded on the basis of the lowest dollar interest cost to be determined by the deduction of the premium, if any, from, or the addition of any amount less than par, to the total dollar interest on the Certificates from their date to their final scheduled maturity. The City's computation of the total net dollar interest cost of each proposal, in accordance with customary practice, will be controlling. 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 Certificates qualify for assignment of CUSIP numbers such numbers will be printed on the Certificates, but neither the failure to print such numbers on any Certificate nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Certificates. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT Within 40 days following the date of their award, the Certificates 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 Certificates, and of customary closing papers, including a no -litigation certificate. On the date of settlement payment for the Certificates 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 Certificates 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 Certificates, and said Official Statement will serve as a nearly -final Page 12 . [. Official Statement within the meaning of Rule 15e2-12 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 Certificates, together with any other information required by law, shall constitute a "Final Official Statement' of the City with respect to the Certificates, as that term is defined in Rule 15c2-12. By awarding the Certificates 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 Certificates are awarded 10 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 Certificates 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 Certificates 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 Certificates for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated October 22, 1991 BY ORDER OF THE CITY COUNCIL /s/ Stephan Jilk City Administrator Page 13