1993-10-12 Recommendations for GO Bonds
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Recommendations
For
City of Albertville, Minnesota
. $245,000
General Obligation Improvement Bonds, Series 1993B
$175,000
General Obligation Refunding Bonds, Series 1993C
Study No. A0116P1 Q1
SPRINGSTED Incorporated
October 12, 1993
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October 12, 1993
Mayor Michael Potter
Members, City Council
Ms. Linda Houghton, Clerk-Treasurer
City of Albertville
5964 Main Avenue NE
Albertville, MN 55301-0131
Re: Recommendations for the Issuance of: .
$245,000 General Obligation Improvement Bonds, Series 1993B
$175,000 General Obligation Wastewater Facility Revenue Refunding Bonds,
Series 1993C
We respectfully request your consideration of our recommendations for the issuance of the
above-named issue according to the terms and conditions set forth in the attached ''Terms of
Proposal."
These recommendations will discuss each of the issues separately, followed by a discussion of
items common to both issues. By issuing these two bond issues at the same time, the City will
reduce the cost of issuing the bonds by avoiding duplication of official statement printing costs
and rating fees.
$245,000 General Obligation Improvement Bonds, Series 1993B
The Improvement Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and
475 to finance an improvement project in the City. The composition of this issue is as follows:
Project Costs:
Construction
Engineering
Contingencies/Legal
Total Project Costs
Costs of Issuance
Capitalized Interest (to 2-1-95)
Allowance for Discount Bidding
Subtotal
Less: Rounding Amount
Total Improvement Bond Issue
$179,980
32,396
10.500
$222,876
10,560
11 ,300
1.715
$246,451
(1.451 )
$245,000
Appendix I is a projection of assessment income for project. The assessments are expected to
be filed on or before October 1, 1994, for first collection in 1995. The assessments will be
City of Albertville, Minnes.
October 12, 1993
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spread over 3 years in equal annual installments of principal with interest charged on the
unpaid balance at a rate of 1.5% over the net interest rate received on the Improvement Bonds.
Appendix II is the recommended maturity schedule for the Improvement Bonds. The
Improvement Bonds will be dated December 1, 1993 and will mature each February 1 from
1996 through 1998. Columns 1 through 6 show the years and amounts of principal and
estimated interest due and payable on the Improvement Bonds. Column 7 shows the
capitalized interest which will cover a portion of the interest payments on the Improvement
Bonds until assessment collections are first available beginning with the August 1, 1995 interest
payment. Column 8 shows the net levy required to pay 1 00% of debt service on the
Improvement Bonds, with Column 9 showing the 105% overlevy requirement as set forth by
State Statute. 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 as developed in Appendix I.
The first interest payment due August 1, 1994, and the subsequent February 1, 1995 interest
payment will be made from capitalized interest included in the Improvement Bonds. Beginning
with the August 1, 1995 interest payment, debt service will be payable from assessment
income.
Included in the principal amount of the issue is a provision for discount bidding in the amount
of $1,715, representing $7 per $1 ,000 bond. The discount is a means of providing the
underwriters with all or part of their working capital and/or a profit for purchasing the bonds
and permits them to reoffer the bonds at or close to a par scale. Due to the short maturity
length of the issue, we do not recommend the Improvement Bonds be subject to prepayment.
The short maturity length of the Improvement Bonds, together with the absence of a call
feature, does not allow the City any flexibility should assessments not come in as projected.
Any shortfall would need to be paid from a general ad valorem tax levy. In conversations with
City personnel, they feel comfortable with the three-year assessment term and expect
collections to come in as projected.
$175,000 General Obligation Refunding Bonds, Series 1993C
The Refunding Bonds are being issued pursuant to Minnesota Statutes, Chapter 475. The
proceeds of this issue will be used to refund the 1994 through 2004 maturities of the City's
$300,000 General Obligation Revenue Clinic Bonds of 1982, dated September 1, 1982 (the
"1982 Bonds"). The 1982 Bonds, which were passed by a referendum, were originally issued to
build a medical clinic in the City. The Albertville Clinic was then leased by the Buffalo Clinic
which in turn assigned the lease to Twenty-Eight Ten, Incorporated, a subsidiary of Health
Central Incorporated. The payment of debt service on the 1982 Bonds was guaranteed by
Health Central. The clinic closed in 1991 and Health Central has continued to make debt
service payments on the 1982 Bonds. The City is releasing them from the lease and is
assuming the remaining debt with the issuance of these bonds. The City plans to use the
Albertville Clinic facility as its new City Hall.
This is considered a full current refunding as the Refunding Bonds are being issued within 90
days of the March 1, 1994 call date of the 1982 Bonds. Attached as Appendix III is a schedule
showing the existing debt service of the 1982 Bonds. On March 1, 1994, the proceeds of the
Refunding Bonds will pay the principal and interest due on March 1, 1994 and prepay the 1995
through 1998 maturities of the 1982 Bonds, thereby defeasing the old issue. The interest rates
on the 1994 through 1998 maturities of the 1982 Bonds range from 10.45% to 11.00%. We
estimate the 1982 Bonds can be refunded at a net interest rate of 4.90%.
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City of Albertville, Minnes_
October 12, 1993
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The maturity schedule for the Refunding Bonds is attached as Appendix IV. The Refunding
Bonds will be dated December 1, 1993 and mature March 1, 1995 through 2004. The
Refunding Bonds are extended beyond the 1998 maturity of the 1982 Bonds through 2004 in
an effort to reduce the overall cost to the City. The City will make a 1993 levy which will pay the
September 1, 1994 interest payment and the March 1, 1995 principal and interest payment.
This cycle will continue for the life of the Refunding Bonds.
Included in the principal amount of the issue is a provision for discount bidding in the amount
of $3,000, representing $17 per $1,000 bond. As with the Improvement Bonds, we do not
recommend the Refunding Bonds be subject to prepayment.
Common To Both Issues
Federal Rebate - ArbitraQe
All tax-exempt bonds are subject to federal arbitrage regulations. The "final" arbitrage
regulations were published in June 1993. One of the requirements included rebating arbitrage
profits to the U.S. Treasury. Generally speaking, all arbitrage profits (the yield difference
between the earnings on the investments and the yield on the obligations) must be rebated to
the Treasury. These issues are treated separately for purposes of exemption from federal
rebate requirements.
The Improvement Bonds will meet the small issuer exemption test as the City will not issue
more than $5 million of tax-exempt obligations during calendar year 1993.
The 1982 Bonds have a final maturity in 1998, and the Refunding Bonds mature through 2004,
thus extending the average maturity and causing the bonds maturing 1999-2004 to be subject
to rebate requirements. However, in this case too, the small issuer exemption is met.
Prior to the 1993 final arbitrage regulations the small issuer exemption also exempted any debt
service funds from rebate requirements. The 1993 regulations changed that so only bona fide
debt service funds are exempt from rebate. A bona fide debt service is defined as a fund for
which there is an equal matching of revenue to debt service expense with a carry over
permitted equal to the greater of the investment earnings in the fund during that year or 1/12 of
the debt service of that year. If the City receives substantial prepayments of special
assessments on the Improvement Bonds, the yield on those funds will have to be restricted to
the yield on the Improvement Bonds. The City will also need to be aware of over-levies in the
Clinic bond fund.
Economic Life of Financed Facilities
The 1993 "final" arbitrage regulations brought all tax-exempt issues into the calculation of
"economic Iife." Previously this requirement was only for private activity bonds. The intent of
this requirement is that the Treasury does not want bonds outstanding longer than is
necessary, thus creating more tax-exempt bonds in the marketplace than are needed. The
general safe harbor for assuring that bonds comply with the regulations is if the average
maturity of the bonds does not exceed 120% of the economic life of the financed facilities.
Since the Improvement Bonds are being issued for street and utility improvements which,
under the Treasury guidelines, have an economic life of 20 years, the Improvement Bonds are
in compliance with this regulation. In regards to the Refunding Bonds, buildings have an
economic life of 50 years, whereby 120% equals 60 years. The average maturity of the
Refunding Bonds is 6.11 years and the time which has elapsed from the date of issuance of the
1982 Bonds (September 1, 1982) to the date of issuance of the new Refunding Bonds
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City of Albertville, Minnes.
October 12, 1993
(December 1, 1993) is 11.25 years, for a total of 17.36 years. Therefore, the Refunding Bonds
are also in compliance with these regulations.
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Federal Reimbursement ReQulations
The Federal Treasury has enacted reimbursement regulations to regulate issuers who wish to
issue tax-exempt bonds to recover costs of prior expenditures. The reimbursement regulations
require that if the issuer proposes to reimburse itself for expenses they paid prior to receipt of
bond proceeds, it must have made a declaration of that intent within 60 days of the actual
payment of the expense. There are exemptions for architectural and engineering fees and
miscellaneous start-up costs. It is our understanding there will be some reimbursement for the
Improvement Bonds and that the City will take whatever actions are necessary to comply with
the federal reimbursement regulations in regards to the Improvement Bonds.
Bank-Qualified Obliaations
The Tax Reform Act also restricts the abirity of banks to deduct tax-exempt interest as a
carrying expense under certain circumstances in calculating their tax liability. Since the City will
not issue more than $10,000,000 of tax-exempt obligations in 1993, these bonds will be
designated as "qualified obligations." This qualification will help the marketability of the issue.
Sale Process
The 1991 Legislature amended bond sale procedures to permit the non-public issuance of
obligations if the issuer retains an independent financial advisor. Springsted Incorporated
remains a proponent of competitive bidding but sees some advantages to the new legislation.
We . recommend competitive negotiated sales where all bidders reasonably expected to
compete for the issues are notified of the pending sales, 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 ~ee no change in your issuing procedures or in the bidding results.
Springsted Incorporated has joined with Capital Guaranty Insurance Company, a municipal
bond insurer, to offer a surety bond service to underwriters in lieu of putting up a good faith
check in order to bid on the bonds. The program is called "Sure-Bid" and we have allowed for
its use in the Terms of Proposal, attached to these recommendations. We believe that the use
of this bidding option will help garner more bids for the bond sale, since it has the potential to
make it easier for an underwriter to bid. There is no cost to the City for this service and
Springsted Incorporated does not have a financial interest in the use of Sure-Bid.
We recommend these bonds be offered for sale on Monday, November 15, 1993 with
proposals received at the offices of Springsted Incorporated at 10:30 A.M. Proposals will be
verified for accuracy and the computations resulting in the final savings for the Refunding
Bonds will be completed. Those results and our recommendations will be presented to the
City Council for consideration of award at 7:30 P.M. the same evening.
Respectfully submitted,
/~td~c~
S;~NGST~~ Incorporated I.
mmr
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APPENDIX I
City ot Albertville, UN
G.O. I~rove.ent Bonds, Series 19938
$245,000
Prepared October 7, 1993
By SPRINGSTED Incorporated
PROJECTED ASSESSMENT INCOME
I~rove.ent Projects
Filing Date: 101 111994
Filing Collect Interest
Year Year Principal i 5.700% Total
..------ .. .. .. .. .. .. .. .. .. --------
1994 1995 81,667 17 ,485a 99, 152
1995 1996 81,667 9,310 90 , 977
1996 1997 81,666 4,655 86,321
TOTALS 245,000 31,450 276,450
a) Includes interest fro. f1l1ng
date to 12/31/1995.
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APPENDIX II
C1ty of Albertv11le, M1nnesota Prepared October 8, 1993
G.O. l.prove.ent Bonds, Ser1es 19938 By SPRINGSTED Incorporated
$245,000
Dated: 12- 1 -1993
Mature: 2- 1
First Interest: 8- 1-1994
Total Cap1tal- Net Projected Cu.ulaUve
Year of Year of Pr1ncipal ized Levy 105% Assess.ent Net CUlRulaUve
Levy Mat. Pr1nc1pal Rates Interest & Interest Interest Requ1red of Total Inco.e Requ1re.ent Surplus
(1 ) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11 ) (12)
1993 1995 0 3.50% 11,279 11,279 11,300 0 0 0 0 21
1994 1996 85,000 3.75% 9,668 94 , 668 0 94,668 99,401 99,152 228 0
1995 1997 80,000 4.00% 6,480 86,480 0 86,480 90 , 804 90 , 977 0 173
1996 1998 80,000 4.10% 3,280 83,280 0 83,280 87,444 86,321 950 0
TOTALS: 245,000 30,707 275,707 11,300 264,428 277,649 276,450 .1,178
Bond Years: 770.83 Annual Interest: 30,707
Avg. Maturity: 3.15 Plus D1scount: 1,715
Avg. Annual Rate: 3.984% Net Interest: 32,422
T.I.C. Rate: 4.219ls N.I.C. Rate: 4.206%
Interest rates are est1aatesj changes aay cause s1gnif1cant alterat10ns of th1s schedule.
The actual underwr1ter's d1scount bid aay also vary.
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APPENDIX III
City of Albertville~ Minnesota
G.O. Rev. Clinic Bonds of 1982
Existing Debt Service
Prepared: 09/04/93
By SPRINGSTED Incorporated
Date Principal Rate Interest Semi-Annual Ann ua 1
03/01/94 25,000.00 10.450% 8,616.25 33,616.25 33,616.25
09/01/94 7,310.00 7,310.00
03/01/95 30,000.00 10.600% 7,310.00 37,310.00 44,620.00
09/01/95 5,720.00 5,720.00
03/01/96 30,000.00 10.750% 5,720.00 35,720.00 41,440.00
09/01/96 4,107.50 4,107.50
03/01/97 35,000.00 10.900% 4,107.50 39,107.50 43,215.00
09/01/97 2,200.00 2,200.00
03/01/98 40,000.00 11. 000% 2,200.00 42,200.00 44,400.00
Totals 160,000.00 47,291.25 2i:l 7 , 2 91 . 2 5 207,291.25
Bond Years: 395.00 All lower calculations Refunded Bonds Only
Avg. Mat.. : 2.469 are made from the date Avg. Mat.. : 2.88
NIC....... : 10.882% of the refunding bonds NIC....... : 10.889
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APPENDIX IV
City of Albertville, Minnesota Prepared October 8, 1993
$175,000 G.O. Refunding Bonds, Series 1993C By SPRINGSTED Incorporated
Refunds G.O.-- Rev. Clinic Bonds of 1982
Dated: 12- 1-1993
Mature: 3- 1
First Interest: 9. 1-1994
Total
.Vear of Vear of Principal 105%
Levy Mat. Principal Rates Interest & Interest of Total
(1 ) (2) (3) (4) (5) (6) (7)
1993 1995 15,000 3.50% 9,595 24,595 25,825
1994 1996 15,000 3.75% 7,151 22,151 23,259
1995 1997 15,000 4.00% 6,588 21,588 22,667
1996 1998 15,000 4.15% 5,988 20,988 22,037
1997 1999 15,000 4.30% 5,365 20,365 21,383
1998 2000 20,000 4.50% 4,720 24,720 25,956
1999 2001 20,000 4.55% 3,820 23,820 25,011
2000 2002 20,000 4.70% 2,910 22,910 24,056
2001 2003 20,000 4.85% 1,970 21,970 23,069
2002 2004 20,000 5.00% 1,000 21,000 22,050
TOTALS: 175,000 49,107 224,107 235,313
Bond Vears:
Avg. Maturity:
Avg. Annual Rate:
T.I.C. Rate:
1,068.75
6.11
4.595%
4 . 909"1
Annual Interest:
Plus Discount:
Net Interest:
N.I.C. Rate:
49, 107
3,000
52, 1 07
4.876%
Interest rates are estiaates; changes aay cause significant
alterations of this schedule.
The actual underwriter's discount bid .ay also vary.
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THE CITY liAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$245,000
CITY OF ALBERTVILLE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B
Proposals for the Bonds will be received on Monday, November 15, 1993, until 10:30 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 7:30 P.M., Central Time, of the same day.
DETAILS OF THE BONDS
The Bonds will be dated December 1, 1993, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing August 1, 1994. Interest will
be computed on the basis of a 360-day year of twelve 3D-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 in the years and amounts as follows:
1996 $85,000
1997 $80,000
OPTIONAL REDEMPTION
1998 $80,000
The Bonds will not be subject to payment 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 assessments against benefitted property. The proceeds will be used to finance an
improvement project within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $243,285 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 $2,450,
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
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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.
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 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 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.
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 Holmes & Graven,
Chartered of 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.
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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 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 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 18, 1993
BY ORDER OF THE CITY COUNCIL
Isl Linda Houghton
Clerk-Treasurer
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THE CllY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$175,000
CllY OF ALBERTVILLE, MINNESOTA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 1993C
Proposals for the Bonds will be received on Monday, November 15, 1993, until 1 0: 30 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 7:30 P.M., Central Time, of the same day.
DETAILS OF THE BONDS
The Bonds will be dated December 1, 1993, as the date of original issue, and will bear interest
payable on March 1 and September 1 of each year, commencing September 1, 1994. 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 March 1 in the years and amounts as follows:
1995 $15,000
1996 $15,000
1997 $15,000
1998 $15,000
1999 $15,000
2000 $20,000
2001 $20,000
2002 $20,000
2003 $20,000
2004 $20,000
OPTIONAL REDEMPTION
The Bonds will not be subject to payment 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. The proceeds will be used to refund
the 1994-2004 maturities of the City's $300,000 General Obligation Revenue Clinic Bonds of
1982, dated September 1, 1982.
TYPE OF PROPOSALS
Proposals shall be for not less than $172,000 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 $1,750,
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
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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.
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 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 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.
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 Holmes & Graven,
Chartered of 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.
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e
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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 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 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 18, 1993
BY ORDER OF THE CITY COUNCIL
Isl Linda Houghton
Clerk-Treasurer
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