97-8519r
94
RESOLUTION NO. 8519
RESOLUTION PROVIDING FOR THE SALE
OF $750,000 TAXABLE GENERAL OBLIGATION
IMPROVEMENT BONDS, SERIES 1997
WHEREAS, the City Council of the City of Richfield, Minnesota, has heretofore
determined that it is necessary and expedient to issue the City's $750,000 Taxable General
Obligation Improvement Bonds, Series 1997 (the "Bonds"), to finance the construction of
various improvements in the City; and
WHEREAS, the City has retained Ehlers and Associates, Inc. in Minneapolis,
Minnesota ("Ehlers"), as its independent financial advisor for the Bonds and is therefore
authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60,
Subdivision 2(9);
NOW, THEREFORE, BE IT RESOLVED by the City Council of City of Richfield,
Minnesota, as follows:
1. Authorization: Findings. The City Council hereby authorizes Ehlers to solicit proposals for
the sale of the Bonds.
2. Meetino: Proposal Openino. The City Council shall meet at the time and place specified
in the Presale Report attached hereto for the purpose of considering sealed proposals for,
and awarding the sale of the Bonds. The City Clerk, or designee, shall open proposals at
the time and place specified in such Terms of Proposal to be included in the Official
Statement.
3. Presale Report. The terms and conditions of the Bonds and the sale thereof are set forth
in the "Presale Report" attached hereto and hereby approved and made a part hereof.
4. Official Statement. In connection with said sale, the officers or employees of the City are
hereby authorized to cooperate with Ehlers 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.
The motion for the adoption of the foregoing resolution was made by Council Member Susag
and duly seconded by Council Member Stokes and, after full discussion thereof and upon a
vote being taken thereon, the following Council Members voted in favor thereof:
Kirsch, Sandahl, Stokes, Susag, and Rosenberg
and the following voted against thesarne: None
Whereupon said resolution was declared duly passed and adopted.
Adopted by the City Council of the City of Richfield, Minnesota thif~th day 0
October, 1997. ?7?,-h. I ~ ./
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Martin J. Kirs ayor
ATTEST: ~
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Thomas P. Ferber, City Clerk
BOND SALE REPORT
.$750,000
Taxable General Obligation Improvement Bonds,
Series 1997
City of Richfield, Minnesota
.......
October 13, 1997
. Ehlers and Associates, Inc.
OVERVIEW
This repon describes the proposed plan for the City of Richfield to issue
$750,000 Taxable General Obligation Improvement Bonds, Series 1997. This
repon has been prepared by Ehlers and Associates, in consultation with City Staff
and bond counsel. This repon deals with:
· Purpose and components of bond issue.
· Structure.
· Other considerations in issuing bonds.
· Market conditions.
· Issuing process.
PURPOSE
The $750,000 Taxable General Obligation Improvement Bonds, Series 1997 are
being issued pursuant to Minnesota Statutes, Chapters 429 and 475, for the
purpose of financing improvements for Told Development's Meridian Crossing
project. The list of specific projects is included in the list of Sources and Uses
attached as Exhibit 1.00.
Financing these projects requires a bond issue in the amount of $750,000.
STRUCTURE AND REPAYMENT
The Bonds are general obligations of the City of Richfield and as such are secured by
a pledge of the City's full faith, credit, and taxing powers. It is the intent of the City
to use the special assessments levied in the years 1997 through 2012 at 101 % of the
annual debt service payment against the benefitting propeny owner for payment of
100% of this bond issue.
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The Bonds would be sold November 10, 1997 and be dated December I, 1997. The
first interest payment on the Bonds will be August I, 1998, and semiannually
thereafter on February I and August I. Pri~cipal on the Bonds will be due on
February I in the years 1999 through 2013. --
The projected debt service and flow of funds can be found in Exhibit 2.00.
OTHER CONSIDERATIONS
Following is a summary of key factors in the finance plan:
· We recommend the following call feature:
Bonds maturing February I, 2006 and thereafter will be subject to prepayment
at the discretion of the City on February I, 2005.
· Bidders on this issue may submit a bid which contains a maturity schedule
providing for any combination of serial bonds and term bonds, subject to
mandatory redemption. If the purchaser of the Bonds designates certain of the
maturities as Term Bonds, subject to a mandatory call, the City will be
responsible for providing a Notice of Call to holders of the Bonds at least 45 days
prior to the call date. The paying agent can provide the proper call notices to
owners of the Bonds. Allowing potential purchasers the term bond option results
in increased bidder interest in this issue and possible lower interest rates.
· These Bonds are taxable and, therefore, not exempt from State or Federal income
taxes. The issuance of the Bonds will not affect the City's annual limit on bank
qualified bonds or bonds eligible for the smaller issuer exemption from arbitrage
rebate.
· The Bonds will be global book entry with a bank designated as the paying agent. As
"paperless" bonds, you will avoid the costs of bond printing and annual registrar
charges. The Paying Agent will invoi~e you for the interest semi-annually and on
an annual basis for the principal coming due. You will be charged only for paying
agent/transfer agent services provided by the bank.
· The City currently uses Norwest Bank Minnesota, NA. in Minneapolis,
Minnesota as Paying Agent for their outstanding book-entry-only Bonds.
· Moody's Investors Service will be asked to rate this issue. The City currently has
an "An rating on its outstanding general obligation bonds.
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. Prior to closing on the Bonds the City Council must take action to order the
improvement and must have a signed petition from the specially benefited
propeny owner petitioning the City for th_e i!l1provements, waiving the public
hearing for the improvements, and agreeing-to be assessed for 100% of the
improvements.
. New regulations of the Securities and Exchange Commission on the continuing
disclosure of municipal securities apply to long-term securities with an aggregate
principal amount of $1,000,000 or more.
Because the aggregate principal amount of the Bonds and any other issues
required to be integrated with the Bonds is less than $1,000,000, the City is
exempt the from Continuing Disclosure requirements of paragraph (b) (5) of Rule
15c2-12 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934 and is not required to enter into any undertaking
to provide continuing disclosure of any kind with respect to the Bonds.
REFUNDING QpPORTUNmES
We have reviewed all outstanding indebtedness for the City and find that it is not
feasible to refund any of the City's outstanding issues at this time.
MARKET CONDmONS
The graph on the following page shows the trends in the Bond Buyer's 20-Year G.O.
Index (BBI) since 1990. While interest rates have risen from historic lows in 1993,
current rates still mirror conditions found several years ago.
Page 3
8.00%
7.50%
7.00%
6.50%
6.00%
5.50%
5.00%
Bond Buyer's 20-Year G.O.lndex
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1990 1991
1992 1993 1994 1995 1996 1997
Ehlers and Associates
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ISSUING PROCESS
Following is a tentative schedule for the steps in the issuing process.
October 27, 1997
City Council adopts resolution calling
for the sale of the Bonds
Submit draft Official Statement and
rating materials to Moodis Investors
Service for credit rating
Distribute Offidal Statement
Week of October 27, 1997
Week of October 27,1997
Week of November 3,1997
.= November 10, 1997
Week of December 1, 1997
Receive credit rating
Bond sale
Bond closing
ADDITIONAL CONSIDERATIONS
Continuing Disclosure: Certain of the City's outstanding debt issues are required to
submit updated operating and financial information by December 31 annually.
According to the continuing disclosure contract between Ehlers and the City, we will
complete this requirement for the City by the December 31, 1997 deadline at no
charge.
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:
City of Richfield, MN
Sources & Uses for the Meridian Crossing Project
Sources
Par Amount of Bonds
Interest Eamed
Total Sources
~
Mitigation of Existing Wetland
Engineering
Removal of buried concrete on site
Soils correction under Phase II building
Traffic light installation and reconstructed median
WSB Associates, Inc.
Fieia Engineering
Change Order - Soils Correction
City Staff Time
Minnesota Pollution Control Agency
A TC (Soils Engineering)
Differential Costs to relocate utilities avoiding right of way on CSM property
Imperial Developers
Shafer Construction
Barr Engineering
Barr Engineering re: Sanitary Sewer /35W
Relocation of Existing Utilities
Holleran-Duitsman Architects
Relocation of US West cable
Curb Masters, Inc.
Total Project Costs
Costs of Issuance
Discount
Rounding Amount
Total Uses
Prepared by Ehlers and Associates
--
.t..MillilT 1.00
"
For Discussion Only
750,000
o
$750,000
216,916
33,500
11,769
12,085
260,367
28,500
25,000
8,000
2,500
4,715
9,700
37,205
16,122
2,800
2,000
22,824
3,908
15,932
1,600
715.443
19,000
11 ,250
4,307
$750,000
10/08197
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For Discussion Only
City of Richfield, MN
General Obligation Taxable Improvement Bonds of 1997
$750,000
Total Total 101% Fiscal
Date Principal Bate Interest tlJ Annual Annual Yem
12/01/97
08/01/98 35,105.00 35,105.00
02/01/99 20,000 6.20 26,328.75 46,328.75 81,433.75 82,248.09 1998
08/01/99 25,708.75 25,708.75
02/01/2000 35,000 6.30 .25,708.75 60,708.75 86,417.50 87,281.68 1999
08/01/2000 24,606.25 24,606.25
02/01/2001 35,000 6.40 24,606.25 59,606.25 84,212.50 85,054.63 2000
08/01/2001 23,486.25 23,486.25
02/0112002 35,000 6.50 23,486.25 58,486.25 81,972.50 82,792.23 2001
08/01/2002 22,348.75 22,348.75
02/01/2003 40,000 6.60 22,348.75 62,348.75 84,697.50 85,544.48 2002
08/01/2003 21,028.75 21,028.75
02/01/2004 40,000 6.70 21,028.75 61,028.75 82,057.50 82,878.08 2003
08/01/2004 19,688.75 19,688.75
02/01/2005 45,000 6.80 19,688.75 64,688.75 84,377.50 85,221.28 2004
08/01/2005 18,158.75 18,158.75
02/0112006 50,000 6.90 18,158.75 68,158.75 86,317.50 87,180.68 2005
08/01/2006 16,433.75 16,433.75
02/01/2007 50,000 7.00 16,433.75 66,433.75 82,867.50 83,696.18 2006
08/0112007 14,683.75 14,683.75
02/01/2008 55,000 7.10 14,683.75 69,683.75 84,367.50 85,211.18 2007
08/01/2008 12,731.25 12,731.25
02/01/2009 60,000 7.20 12,731.25 72,731.25 85,462.50 86,317.13 2008
08/01/2009 10,571.25 10,571.25
02/0112010 65,000 7.30 10,571.25 75,571.25 86,142.50 87,003.93 2009
08/01/2010 8,198.75 8,198.75
02/01/2011 65,000 7.40 8;198.75 73,198.75 81,397.50 82,211.48 2010
08/01/2011 5,793.75 5,793.75
02/0112012 75,000 7.45 5,793.75 80,793.75 86,587.50 87,453.38 2011
08/01/2012 3,000.00 3,000.00
02/01/2013 80,000 7.50 3,000.00 83,000.00 86,000.00 86,860.00 2012
$750,000 514,311.25 1,264,311.25 1,264,311.25
Nmu
Dated: 12/01/97
Interest Start: 08/01/98
Bond Years:
Average Life:
7,150.00
9.533333333
Discount: 11,250.00
Average Coupon:
Net Interest Cost:
7.1931SOk
7.35051%
Prepared by Ehlers and Associates
10/08197
Resolution No. 8519
Council Member Susag
introduced the following resolution and moved its adoption:
Resolution Providing for the Sale of
$750,000 Taxable General Obligation Improvement Bonds, Series 1997
A. WHEREAS, the City Council of the City of Richfield, Minnesota, has heretofore determined that it is
necessary and expedient to issue the City's $750,000 Taxable General Obligation Improvement Bonds,
Series 1997 (the "Bonds"), to finance the construction of various improvements in the City; and
B. WHEREAS, the City has retained Ehlers and Associates, Inc., in Minneapolis, Minnesota ("Ehlers"), as
its independent financial advisor for the Bonds and is therefore authorized to solicit proposals in
accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9);
NOW, THEREFORE, BE IT RESOLVED by the City Council of City of Richfield, Minnesota, as follows:
1. Authorization: FindinlZs. The City Council hereby authorizes Ehlers to solicit proposals for the sale of the
Bonds.
2. Meeting:: Prooosal OoeninlZ. The City Council shall meet at the time and place specified in the Presale
Report attached hereto for the purpose of considering sealed proposals for, and awarding the sale of the
Bonds. The City Clerk, or designee, shall open proposals at the time and place specified in such Terms
of Proposal to be included in the Official Statement
3. Presale Reoort. The terms and conditions of the Bonds and the sale thereof are set forth in the "Presale
Report" attached hereto and hereby approved and made a part hereof.
4. Official Statement. In connection with said sale, the officers or employees of the City are hereby
authorized to cooperate with Ehlers 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.
The motion for the adoption of the foregoing resolution was duly seconded by Council Member
Stokes and, after full discussion thereof and upon a vote being taken thereon, the
following Council Members voted in favor thereof:
Kirsch, Sandahl, Susag, Stokes, Rosenberg
and the following voted against the same: None
Whereupon said resolution was declared duly passed and adopted.
Dated this 27th day of October
,1997.
City Clerk
(SEAL)
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