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Home My WebLink About7.a. Set 1989 Bond Sale / � • � � ITEM � 7 A Recommendations For City of Rosemount, Minnesota $2,575,000 General Obiigation Improvement Bonds, Series 1989B Study No. 3509 SPRINGSTED incorporated . May 11, 1989 { 1 . SPRINGSTED � • PUBLIC FINANCE ADVISORS 85 East Seventh Place,Suite 100 Saint Paul,Minnesota 55101•2143 612•223•3000 FAX:612•223•3002 May 11, 1989 Mayor Rollan Hoke Members, City Council Mr. Stephan Jilk, Administrator City Hall 2875 145th Street West Rosemount, MN 55068 Re: Recommendations for the Issuance of $2,575,000 General Obligation Improvement Bonds, Series 19896 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 "Official Terms of Offering." The timing of this issue is prompted by the need to secure definitive financing for the City's 1986 Temporary Improvement Bonds, which become due and payable on August 1, 1989. In 1986, the City issued $2,150,000 of General Obligation Temporary Improvement Bonds to finance various improvement projects to be undertaken in the City. It was anticipated that substantial prepayments of assessments would be received, and therefore, the temporary financing process was deemed to be the most expedient at that time. On August 1, 1989 the City must repay the principal amount of the issue, plus $58,050 in interest for total of $2,208,050. We have been informed the City has on-hand in the debt service accaunt for this issue a total of $1,736,450, leaving a shortfall of $471,600. In order to have bond proceeds available prior to the August 1 payment date, it is necessary to issue these bonds at this time. This issue will also finance three new projects to be undertaken by the City for which the initial improvement hearings have been held and the projects have been ordered. These projects include the Shannon Parkway, West Ridge 3rd Addition and Valley Oaks Phase 4. A fourth project included in this bond issue will complete the financing requirement for the Chippendale Avenue Streef Project. You will recall in 1988, due to a significant reduction in the scope of one improvement project, a portion of the Chippendafe Project was included in the 1988 improvement bond issue in order to satisfy legal bonding requirements. It is, therefore, necessary at this time to include the remaining portion of that project in this issue. It was anticipated the Chippendale Project would require $450,000 of total costs, and since $221,000 was included in the 1988 financing package, the remaining $229,000 is included in this financing program. The project costs and the sizing of the bond issue are set forth in Appendix I, attached. You wil) note the City is expected to contribute $61,000 from the Water Fund, $27,000 from the Sewer Fund and $25,000 as the trailways dedication as cash contributions to these projects. The total net required cost for all projects is estimated to be $2,379,600. To this we have Indiana Office: Wisconsin Office: 251 North Illinois Street,Suite 1510 500 Elm Grove Road,Suite 101 Indianapolis,Indiana 46204•1942 Elm Grove,Wisconsin 53122•0037 317•237•3636 414•782•8222 Fax:317•237•3639 Fax:414•782•2904 � City of Rosemount, M� asota May i 1, 1989 added $22,60� for issuanc e costs, $32,190 as an allowance for dto ben$2b579�440afor t earnin s of $4,440, bringing the net financing requirement to $145,050 for capitalized interest. Totai costs, therefore, are estima e which we anticipate investmen g ions from the Department of 355 will be assessed against benefited $2,575,000. Of these,costs, it is expected iha�s annual contribu# property, and further, that the City wi�� apP Y Transpo rtation for a total MSA contribution of$221,650. The City's net share of this financing is expected to be $632,435. a ments for this issue wiil be paid from assessments against The buik of the debt service p Y ora borrds, we have bes essments�wa�toun'for benefited property. For the 1986 temp rY g, These a $108,065 of principal assessments are stili outstandin a�d balance. It is anticipated that another eight years at an interest rate of 8.75% on the unp � S Wi�� be assessed in ' endale Avenue Project will be attributabt to this issue. It is only $65,445 for the Chipp expected the Chippendale Avenue and Valley Oaks Phase 4 pro�e 1 g89 for first collection in 1990, and the West Ridge�nr nA99�1�on�aue to thehtiming of hese Projects will be assessed in 1990 for first collecti ro ects s it is necessary to include capitalized interea �revenues from all these pnt j rest assessment , til such time payments due and payable on the bonds un are generated. ex ected timing and amounts of assessme�he te bected�re e pt of assessment B a s e d o n t h e P en di x I I, w h i c h s e t s f o rt h p property,we have prepared App incom e, We note that while we are anticipating tha� batanfce,ea substant al sport on Sof tha over ten years, with interest charged on the unp and therefore, substan i assessments will be spread against developing property, ts ma be achieved. Further, the initial term of assessments may be shea erehon� prepaymen Y and as you will that de icted here. The estimate of collectio Ve°nent bondessues of the City ten Y bonds p ortion of the of time is consistent with the last three impro rovided a substantial p ro ections find later in these recommendations, we have ments. For purposes of making p J c a l l a b l e t o a c c ommodate these potential prepaY interest rate of the issue. U p o n t h e of total ass essment income, we have assu m e d t h e i n t e r est rate on the assessments will e 8.75%, or approximately 2% over the estimated coupon successfu I sale of these bonds the interest rate on the assessments can be adjuste accordingly. d in the rojection of assessment income �from our�p e�o ss ecommendations Also include p the debt service account for this issue. You will recall h the issuance of debt. that the MSA contributions, an an annualized basis such h�this, will reimburse princip�l only and the City wiA be responsible for any interest incurred t gntributions, we have prepared Based on the projections of assessment income and MSA co hrou h 2001. Columns 1 ich shows the recommended cash flow for 1991b�nd is�sue. The bonds will qppendix 111, wh 1 from a able be dated July 1, 1989 and mature each February the net throug h 6 show the years and amounts of princip�a�intere tt'w'i h Column 8 showi 9p y ent on these bonds. Colurrsn 7 shows the capita ize e uired to pay 100%of debt service. Col ao o erlevy s a pro�ection totherbondholde0r levy r q ou Wi�� recall the 5/ as set forth by statute, and y and th e investor in the event 100% of expectedCome and Column 11h hows the net levy show the projections of assessment and MSA in re uirement which represents the City's share of these improvement projects. q Page 2 -.�- - Page 3 of 3 City of Rosemount, Minnesota Prepared May 9, 1989 1989 Improvement Projects By SPRINGSTED Incorporated Projected Assessment Income PROJECTED ASSESSMENT INCOME - - - - TOTAL - - - - - `Filing Collect , • Year Year Principal Interest Total 1988 1989 13,508 8,127 21,635 1989 1990 64,914 39,127 104,041 1990 1991 197,403 174,254 371,657 1991 1992 197,403 129,868 327,271 1992 1993 197,403 114,703 312,106 1993 1994 197,403 99,539 296,942 1994 1995 197,403 84,375 281,778 1995 199fi 197,404 69,211 266,615 1996 1997 183,895 54,047 237,942 1997 1998 183,895 39,894 223,789 1998 1999 183,890 25,743 209,633 1999 2000 132,484 11,592 144,076 � TOTALS 1,947,005 850,480 2,797,485 � � � m � ... . CITY OF ROSEMOUNT, MINNESOTA Prepared May 10, 1989 $2,575,000 General Obligation By SPRINGSTED Incorporated Improvement Bonds, Series 1989 B Dated: 7- 1-1989 Mature: 2- 1 Total Capital- Net Projected Total Year of Year of Principal ized Levy 105% Assessment Net Levy Mat. Principal Rates Interest & Interest Interest Required of Total Income Requirement �l) �2) �3) �4) �5) �6) ��) �$) �9) �10) (11) 1988 1990 0 0.00% 101,614 101,614 81,000 20,614 21,645 21,635 10 1989 1991 85,000 6.60qo 174,196 259,196 73,100 186,096 195,401 104,041 91,350 � 1990 1992 270,000 6.65�0 168,586 438,586 0 438,586 460,515 371,657 88,858 1991 1993 250,000, 6.65I 150,631 400,631 0 400,631 420,663 327,271 93,392 1992 1994 250,000 6.70'/0 134,006 384,006 0 384,OOb 403,206 312,106 91,100 1993 1995 250,�00 6.70% 117,256 367,256 0 367,256 3$5,619 296,942 88,677 1994 1996 255,000 6.75% 100,506 355,506 0 355,506 373,281 281,778 91,503 1995 1997 255,000 6.75qo $3,293 338,293 0 338,293 355,208 266,615 88,593 1996 1998 245,000 6.80% 66,080 311,080 0 311,080 326,634 237,942 88,692 1997 1999 250,000 6.85% 49,420 299,420 0 299,420 314,391 223,789 90,602 1998 2000 255,000 6.90% 32,295 287,295 0 287,295 301,660 209,633 92,027 1999 2001 210,000 7.00% 14,700 224,700 0 224,700 235,935 144,076 91,859 TOTALS: 2,575,000 1,192,583 3,767,583 154,100 3,613,483 3,794,158 2,797,485 996,673 . Bond Years: 17,512.08 Annual Interest: 1,192,583 � Avg. Maturity: 6.80 Plus Discount: 32,190 Avg. Annual Rate: 6.810% Net Interest: 1,224,773 N. I .C. Rate: 6.994% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. � y �' v cQ .D m m cfl Z � X . ii i � OFFICIAL TERMS OF OFFERING $2,575,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATtON iMPROVEMENT BONDS, SERIES 1989B Sealed bids for the Bonds wiil be opened by the City Administrator or his designee on Tuesday, June 20, 1989, at 12:00 Noon, Centrai Time, at the offices of Springsted incorporated, 85 East 7th Place, Saint Paul, Minnesota 551 01-21 43. Consideration for award of the Bonds will be by the City Council at 7:30 P.M., Central Time, of the same day. DETAILS OF THE BONDS The Bonds will be dated July 1, 1989, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 1990. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. The Bonds will be issued in the denomination of $5,000 each, or in integral multiples thereof as requested by the Purchaser, and fuily 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 his address as it appears on the books of the Registrar as of the 15th day of the calendar month next preceding the interest payment. The Bonds will mature February 1 in the amounts and years as follows: $ 85,OQ0 1991 $250,000 1993-1995 $245,000 1998 $255,000 2000 $270,000 1992 $255,000 1996-1997 $250,000 1999 $210,000 2001 OPTIONAL REDEMPTION The City may elect on February 1, 1995, and on any interest payment date thereafter, to prepay Bonds due on or after February 1, 1996. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid which have the latest maturity date will be prepaid first. If only part of the Bonds having a common maturity date are called for prepayment the specific Bonds to be prepaid will be chosen by lot by the Registrar. All prepayments shall be at a price of par and 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 the construction costs of new improvements in the City and, together with available funds on hand, refinance the City's $2,150,000 General Obligation Temporary Improvement Bonds, Series 1986A, dated August 1, 1986. TYPE OF BID A sealed bid for not less than $2,542,810 and accrued interest on the total principal amount of the Bonds shall be filed with the undersigned prior to the time set for the opening of bids. Also prior to the time set for bid opening, a certified or cashier's check in the amount of $25,750, payable to the order of the City, shall have been filed with the undersigned or SPRINGSTED Incorporated, the City's Financial Advisor. No bid will be considered for which said check has not been filed. The check of the Purchaser will be retained by the City as liquidated damages Page 10 � � � in the event the Purchaser fails to compiy with the accepted bid. The City wiil deposit the check of the Purchaser, the amount of which will be deducted at settlement. No bid shall be withdrawn after the time set for opening bids unless the meeting of the City scheduled for - consideration of the bids is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates offered by Bidders shall be in integral multiples of 5/100 or 1/8 of 1%. No rate for any maturity shall be more than 1.0% lower than any prior rate. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. AWARD The Bonds will be awarded to the Bidder offering 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 Bonds from their date to their final scheduled maturity. The City's computation of the total net dollar interest cost of each bid, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii) reject all bids without cause, and, (iii) re}ect any bid which the City determines to have failed to comply with the terms herein. 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 GUSIP 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 Purchase� to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SEfTLEMENT 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 Paui 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 1:00 P.M., 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 Underwriters may obtain a copy of the Offieial Statement by request to the City's Financial Advisor prior to the bid opening. The Purchaser will be provided with 25 copies of the Official Statement. Dated May 16, 1989 BY ORDER OF THE CITY COUNCIL Is/Stephan Jilk Administrator Page 11