HomeMy WebLinkAbout06.f. 2018A G.O. Improvement Bonds - Authorizing Issuance and Setting Bond Sale
EXECUTIVE SUMMARY
City Council Regular Meeting: July 2, 2018
AGENDA ITEM: 2018A G.O. Improvement Bonds -
Authorizing Issuance and Setting Bond
Sale
AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO.: 6.f.
ATTACHMENTS: Resolution and Recommendations APPROVED BY: LJM
RECOMMENDED ACTION: Motion to adopt a resolution Providing for the Competitive
Negotiated Sale of $930,000 of General Obligation Improvement Bonds, Series 2018A.
ISSUE
The authorization to issue bonds for the construction of street and utility improvements for the Greystone
7th Addition.
BACKGROUND
The City Council is being asked to consider authorizing the issuance and setting the sale of General
Obligation Improvement bonds for the Greystone 7th Addition. The developer has requested that the City
issue these bonds for the infrastructure improvements associated with the development. These bonds will
be repaid through special assessments levied for this project.
Bids will be open until Monday, August 6, 2018, at 10:00 A.M. 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 7:00 P.M., Central Time, of the same day.
RECOMMENDATION
Staff recommends the City Council adopt a resolution providing for the competitive negotiated sale of
$930,000 of General Obligation Improvement Bonds, Series 2018A.
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City of Rosemount
Dakota County, Minnesota
Resolution 2018-__
Resolution Providing for the Competitive Negotiated
Sale of $930,000 General Obligation
Improvement Bonds, Series 2018A
WHEREAS, the City Council of the City of Rosemount, Minnesota (the “City”), has heretofore
determined that it is necessary and expedient to issue its $930,000 General Obligation Improvement
Bonds, Series 2018A (the “Bonds”) to finance street and utility improvements in the City;
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 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,
Finance Director 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.
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ADOPTED this 2nd day of July, 2018.
______________________________________
William H. Droste, Mayor
ATTEST:
Jeff May, Deputy City Clerk
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CERTIFICATION
STATE OF MINNESOTA )
COUNTY OF DAKOTA ) ss
CITY OF ROSEMOUNT )
I am the duly appointed, acting and qualified City Clerk of the City of Rosemount, Dakota County,
Minnesota do hereby certify that I have examined the City of Rosemount records and the Minute
Book of said City for the meeting of the 2nd of July, 2018 A RESOLUTION PROVIDING FOR
THE COMPETITIVE NEGOTIATED SALE OF $930,000 GENERAL OBLIGATION
IMPROVEMENT BONDS, SERIES 2018A was approved and is a true and correct copy of the
City Proceedings relating to said Resolution.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of said City this _____ day of
July, 2018.
Deputy City Clerk
City of Rosemount
Dakota County, Minnesota
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EXHIBIT A
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE
THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE
FOLLOWING BASIS:
TERMS OF PROPOSAL
$930,000* CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2018A
(BOOK ENTRY ONLY)
Proposals for the above-referenced obligations (the “Bonds”) will be received by the City of
Rosemount, Minnesota (the “City”) on Monday, August 6, 2018 (the “Sale Date”) until 10:30
A.M., Central Time at the offices of Springsted Incorporated (“Springsted”), 380 Jackson Street,
Suite 300, Saint Paul, Minnesota, 55101, after which time proposals will be opened and
tabulated. Consideration for award of the Bonds will be by the City Council at its meeting
commencing at 7:00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of a bidder to reach Springsted prior to the
time of sale specified above. All bidders are advised that each proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Bonds regardless of the
manner in which the proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046
to Springsted. Signed proposals, without final price or coupons, may be submitted to Springsted
prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final
proposal price and coupons, by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in
the submitted proposal.
OR
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARITY ®. For purposes of the electronic bidding process, the time as maintained by PARITY®
shall constitute the official time with respect to all proposals submitted to PARITY®. Each
bidder shall be solely responsible for making necessary arrangements to access PARITY® for
purposes of submitting its electronic proposal in a timely manner and in compliance with the
requirements of the Terms of Proposal. Neither the City, its agents, nor PARITY® shall have
any duty or obligation to undertake registration to bid for any prospective bidder or to provide or
ensure electronic access to any qualified prospective bidder, and neither the City, its agents, nor
PARITY® shall be responsible for a bidder’s failure to register to bid or for any failure in the
proper operation of, or have any liability for any delays or interruptions of or any damages
caused by the services of PARITY®. The City is using the services of PARITY ® solely as a
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communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is not
an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARITY®, this
Terms of Proposal shall control. Further information about PARITY®, including any fee
charged, may be obtained from:
PARITY ®, 1359 Broadway, 2nd Floor, New York, New York 10018
Customer Support: (212) 849-5000
DETAILS OF THE BONDS
The Bonds will be dated as of the date of delivery and will bear interest payable on February 1
and August 1 of each year, commencing August 1, 2019. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. The Bonds will mature February 1 in the years and amounts* as follows: 2020 $170,000 2021 $185,000 2022 $190,000 2023 $190,000 2024 $195,000
* The City reserves the right, after proposals are opened and prior to award, to increase or reduce the
principal amount of the Bonds or the amount of any maturity or maturities in multiples of $5,000. In the event the
amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread
per $1,000 of Bonds as that of the original proposal. Gross spread for this purpose is the differential between the
price paid to the City for the new issue and the prices at which the proposal indicates the securities will be initially
offered to the investing public. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at
a price of par plus accrued interest to the date of redemption scheduled to conform to the
maturity schedule set forth above. In order to designate term bonds, the proposal must specify
“Years of Term Maturities” in the spaces provided on the proposal form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Bond,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company (“DTC”),
New York, New York, which will act as securities depository for the Bonds. Individual
purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof
of a single maturity through book entries made on the books and records of DTC and its
participants. Principal and interest are payable by the registrar to DTC or its nominee as
registered owner of the Bonds. Transfer of principal and interest payments to participants of
DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial
owners by participants will be the responsibility of such participants and other nominees of
beneficial owners. The lowest bidder (the “Purchaser”), as a condition of delivery of the Bonds,
will be required to deposit the Bonds with DTC.
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REGISTRAR
The City will name the registrar which shall be subject to applicable regulations of the Securities
and Exchange Commission. The City will pay for the services of the registrar.
OPTIONAL REDEMPTION
The Bonds will not be subject to redemption in advance of their respective stated maturity dates.
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 assessment from benefited properties for repayment of a portion of the Bonds. The
proceeds of the Bonds will be used, along with other available City funds, to finance various
street and related utility improvements within the City.
BIDDING PARAMETERS
Proposals shall be for not less than $920,700 plus accrued interest, if any, on the total principal
amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving
proposals on the Sale Date 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 1/100 or 1/8 of 1%. The initial price to the public for each
maturity as stated on the proposal must be 98.0% or greater. 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.
ESTABLISHMENT OF ISSUE PRICE
In order to provide the City with information necessary for compliance with Section 148 of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated
thereunder (collectively, the “Code”), the Purchaser will be required to assist the City in
establishing the issue price of the Bonds and shall complete, execute, and deliver to the City
prior to the closing date, a written certification in a form acceptable to the Purchaser, the City,
and Bond Counsel (the “Issue Price Certificate”) containing the following for each maturity of
the Bonds (and, if different interest rates apply within a maturity, to each separate CUSIP
number within that maturity):: (i) the interest rate; (ii) the reasonably expected initial offering
price to the “public” (as said term is defined in Treasury Regulation Section 1.148-1(f) (the
“Regulation”)) or the sale price; and (iii) pricing wires or equivalent communications supporting
such offering or sale price. Any action to be taken or documentation to be received by the City
pursuant hereto may be taken or received on behalf of the City by Springsted.
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The City intends that the sale of the Bonds pursuant to this Terms of Proposal shall constitute a
“competitive sale” as defined in the Regulation based on the following:
(i) the City shall cause this Terms of Proposal to be disseminated to potential bidders
in a manner that is reasonably designed to reach potential bidders;
(ii) all bidders shall have an equal opportunity to submit a bid;
(iii) the City reasonably expects that it will receive bids from at least three bidders that
have established industry reputations for underwriting municipal bonds such as
the Bonds; and
(iv) the City anticipates awarding the sale of the Bonds to the bidder who provides a
proposal with the lowest true interest cost, as set forth in this Terms of Proposal
(See “AWARD” herein).
Any bid submitted pursuant to this Terms of Proposal shall be considered a firm offer for the
purchase of the Bonds, as specified in the proposal. The Purchaser shall constitute an
“underwriter” as said term is defined in the Regulation. By submitting its proposal, the
Purchaser confirms that it shall require any agreement among underwriters, a selling group
agreement, or other agreement to which it is a party relating to the initial sale of the Bonds, to
include provisions requiring compliance with the provisions of the Code and the Regulation
regarding the initial sale of the Bonds.
If all of the requirements of a “competitive sale” are not satisfied, the City shall advise the
Purchaser of such fact prior to the time of award of the sale of the Bonds to the Purchaser. In
such event, any proposal submitted will not be subject to cancellation or withdrawal.
Within twenty-four (24) hours of the notice of award of the sale of the Bonds, the Purchaser shall
advise the City and Springsted if 10% of any maturity of the Bonds (and, if different interest
rates apply within a maturity, to each separate CUSIP number within that maturity) has been sold
to the public and the price at which it was sold. The City will treat such sale price as the “issue
price” for such maturity, applied on a maturity-by-maturity basis. The City will not require the
Purchaser to comply with that portion of the Regulation commonly described as the “hold-the-
offering-price” requirement for the remaining maturities, but the Purchaser may elect such
option. If the Purchaser exercises such option, the City will apply the initial offering price to the
public provided in the proposal as the issue price for such maturities. If the Purchaser does not
exercise that option, it shall thereafter promptly provide the City and Springsted the prices at
which 10% of such maturities are sold to the public; provided such determination shall be made
and the City and Springsted notified of such prices whether or not the closing date has occurred,
until the 10% test has been satisfied as to each maturity of the Bonds or until all of the Bonds of
a maturity have been sold.
GOOD FAITH DEPOSIT
To have its proposal considered for award, the Purchaser is required to submit a good faith
deposit to the City in the amount of $9,300 (the “Deposit”) no later than 1:30 P.M., Central Time
on the Sale Date. The Deposit may be delivered as described herein in the form of either (i) a
certified or cashier’s check payable to the City; or (ii) a wire transfer. The Purchaser shall be
solely responsible for the timely delivery of its Deposit whether by check or wire transfer.
Neither the City nor Springsted have any liability for delays in the receipt of the Deposit. If the
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Deposit is not received by the specified time, the City may, at its sole discretion, reject the
proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter
award the sale to such bidder.
Certified or Cashier’s Check. A Deposit made by certified or cashier’s check will be considered
timely delivered to the City if it is made payable to the City and delivered to Springsted
Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101 by the time specified
above.
Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon
submission of a federal wire reference number by the specified time. Wire transfer instructions
will be available from Springsted following the receipt and tabulation of proposals. The
successful bidder must send an e-mail including the following information: (i) the federal
reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to
which it applies.
Once an award has been made, the Deposit received from the Purchaser will be retained by the
City and no interest will accrue to the Purchaser. The amount of the Deposit will be deducted at
settlement from the purchase price. In the event the Purchaser fails to comply with the accepted
proposal, said amount will be retained by the City.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City.
The City's computation of the interest rate of each proposal, in accordance with customary
practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and (iii) reject any proposal that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
The City has not applied for or pre-approved a commitment for any policy of municipal bond
insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance and a
bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of
the desired insurer must be set forth on the bidder’s proposal. The City specifically reserves the
right to reject any bid specifying municipal bond insurance, even though such bid may result in
the lowest TIC to the City. All costs associated with the issuance and administration of such
policy and associated ratings and expenses (other than any independent rating requested by the
City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the
policy after the award of the Bonds shall not constitute cause for failure or refusal by the
successful bidder to accept delivery of the Bonds.
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CUSIP NUMBERS
If the Bonds qualify for the assignment of CUSIP numbers such numbers will be printed on the
Bonds; however, 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. Springsted will apply for CUSIP numbers pursuant to Rule G-34 implemented by the
Municipal Securities Rulemaking Board. The CUSIP Service Bureau charge for the assignment
of CUSIP identification numbers shall be paid by the Purchaser.
SETTLEMENT
On or about September 6, 2018, the Bonds will be delivered without cost to the Purchaser
through DTC in New York, New York. Delivery will be subject to receipt by the Purchaser of
an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, 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 that shall be received at the
offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance
with the terms of payment for the Bonds has been made impossible by action of the City, or its
agents, the Purchaser shall be liable to the City for any loss suffered by the City by reason of the
Purchaser's non-compliance with said terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The Purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior
to delivery of the Bonds.
OFFICIAL STATEMENT
The City has authorized the preparation of a Preliminary Official Statement containing pertinent
information relative to the Bonds, and said Preliminary Official Statement has been deemed final
by the City as of the date thereof within the meaning of Rule 15c2-12 of the Securities and
Exchange Commission. For copies of the Preliminary Official Statement or for any additional
information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the
City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101,
telephone (651) 223-3000.
A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared, specifying
the maturity dates, principal amounts, and interest rates of the Bonds, together with any other
information required by law. By awarding the Bonds to the Purchaser, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
Purchaser up to 25 copies of the Final Official Statement. The City designates the Purchaser as
its agent for purposes of distributing copies of the Final Official Statement to each syndicate
member, if applicable. The Purchaser agrees that if its proposal is accepted by the City, (i) it
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shall accept designation and (ii) it shall enter into a contractual relationship with its syndicate
members for purposes of assuring the receipt of the Final Official Statement by each such
syndicate member.
Dated July 2, 2018 BY ORDER OF THE CITY
COUNCIL /s/ Jeff May,
Deputy City Clerk