12-16-81 agenda
CITY OF RICHFIELD, MINNESOTA
Office of City Manager
Council Letter No. 432
Agenda December 16, 1981
The Honorable Mayor
and
Members of the City
City of Richfield
Council Members:
Council
Subject:
Award of Bids, Redevelopment Bonds
of 1981
There is a special council meeting scheduled for 5:30 p.m.
December 16, 1981, for purposes of awarding the bid for the sale
of $2,450,000 in redevelopment bonds. Bids were scheduled to be
opened at 11:30 a.m. on December 16.
Although the city's financial consultant had received in-
dications of interest from two bidders, no bids were submitted
at the time of the bid opening. The two interested bidders in-
dicated to us that they had not submitted a bid at this time be-
cuase they could not bid at an interest rate of less than 12 per-
cent. Minnesota Statutes forbids the city from paying an interest
rate of more than 12 percent.
At this time, the city has three major alternatives in
seeking to market these bonds. A representative of Evenson-Dodge,
Inc., financial consultants, will be present at the special
council meeting to describe these alternatives in more detail.
In summary, we can seek to market the.bonds in one of these ways:
1. Within 30 days, negotiate a sale of the bonds.
Under this alternative, the council would author-
ize the city manager and financial consultants to
contact interested purchasers, and to negotiate
an interest rate with them. Any bond issue sold in
this mannter would have to be identical to the bond
issue for which bids were solicited;
2. Within 30 days, readvertise for competitive bids for
the sale of the bond issue, with no changes in the
issue.
3. Restructure the bonds, so that the issue would be of
a different size, maturity, or otherwise changed so
it would legally be a different bond sale than that
previously advertised, and advertise for competitive
Council Letter No. 432 -2- December 16, 1931
bids for such a restructured bond.
It is the recommendation of the staff that the city
council adopt a resolution authorizing the city manager and fin-
ancial consultants to seek to sell the bonds through a negotiated
sale, within the next 30 days. In the meantime, it will be the
intention of the staff to again analyze the proposed bond sale,
in an effort to determine if it can be changed in such a way as
to poetntially make the bonds more marketable. It appears that
the most likely change, from a marketability standpoint, would
be to shorten the length of the issue. If this were done, it
would be necessary to adjust some of the assumption regarding
tax increment flow which were made in developing adequate financial
support to retire the debt service on the bond.
A resolution auhtorizing the staff to seek a negotiated
sale of the bonds will be presented at the council meeting.
Respectfully submitted,
14
Karl Nollenberger
City Manager
KN/eja
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