HomeMy WebLinkAbout7 - General Obligation Improvement Bonds - Res. 91-05
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AGENDA:
REQUESTED BY :
SUBJECT MATTER:
DATE:
INTRODUCTION:
"CELEBRATE PRIOR LAKE'S CENTENNIAL - 1991"
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RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER ISSUANCE OF $525,000.00 GENERAL
OBLIGATION IMPROVEMENT BONDS - RESOLUTION 91-05
FEBRUARY 4, 1991
During the course of 1990 the City utilized
carryover funds in the Construction Fund to
finance Project 90-12 Tower & Toronto street
improvements and Pro~ect 90-13 North Shore
Oaks 2nd & 3rd which 1nvolved the installation
of sewer and water. These construction dollars
were actually reserved for our share of the
County Road 21 bridge and CSAH 21 improvements
to the east which had been bonded for two
years prior. However, they became available
due to the fact that the funding commitments
for those two projects were not required until
1991.
By utilizing this construction fund balance
two advantages were realized. First the city
was able to capitalize on the opportunity to
complete the projects in their entiretr and
assess them accordingly. By accomplish1ng a
project in this fashion we were able to
determine the exact funding necessarr for
bonding rather than working off an est1mate.
Normally we do not have this luxury as the
dollars for construction projects are required
upfront and are quickly expended.
Secondly, by delaying bonding during 1990 and
consolidating those needs with our equipment
certificates, we will be able to reduce our
financing costs associated with the issuance
of bonds. The elimination of capitalized
interest is the greatest savings achieved.
Therefore, the request before the Council is
to consider approval to issue $525,000.00 of
general obligation bonds to restore the
Construction Fund balance. This will provide
appropriate funding to satisfy the cooperative
agreement requirements regarding the bridge
and completion of the first phase of CSAH 21
east extension.
The City Council conducted public hearings on
March 19, 1990 to consider the realignment of
Tower and Toronto streets and April 16, 1990
for the North Shore Oaks sewer and water
project.
4629 Dakota 51. S.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 I Fax (612) 447-4245
BACKGROUND:
,
An Equal Opportunity/Affirmative Action Employer
DISCUSSION:
ALTERNATIVES:
RECOMMENDATION:
Upon the conclusion of the public hearing
process, Resolutions 90-15 & 90-22 were
adopted ordering the improvements.
Assessment hearings for both projects were
conducted on September 17, 1990. Subsequently,
Resolutions 90-50 & 90-51 were approved
adopting the respective assessment rolls for
each project.
The City will not be insuring the bond issue
in an effort ~ secure a AAA bond rating
because the issue is not large enough in size
to offset the cost of the 1nsurance premium
against potential interest savings over the
term of the bond issue.
The structure of the bond issue itself will be
based upon reimbursement of the following
components:
Net construction cost
(less MSAS)
Engineerin~ (15%)
Bond print1ng
Bond registration
Bond ratin9
Legal opin10n
Discount (1.80%)
Fiscal Fee
Rounding
$722,905.00
$330,602.00>
$108,435.00
$ 400.00
$ 600.00
$ 1,500.00
$ 2,250.00
$ 9,450.00
$ 11,500.00
$< 1,438.00>
$525,000.00
Grand Total
No ad valorem tax levy will be required as
100% of these costs have already been assessed
and certified to the County. The following
percentages illustrate how the bond issue will
cash flow in terms of assessment payback:
Five Years 5.5%
Ten Years - 53.5%
Twenty Years - 41.0%
If bid today a net effective interest rate of
6.50% would probably be a close estimate.
The alternatives are as follows:
1. Approve resolution establishing the date of
bond sale as submitted.
2. Table action for further consideration.
Staff would recommend Alternative #1 approving
the sale of general obligation improvement
bonds in the amount of $525,000.00. Steve
Mattson from Juran & Moody Inc. will be
present at the meeting to discuss the
resolution establishing the date of public
sale.
BUDGET IMPACT:
ACTION REQUIRED:
No impact upon the 1991 operating budget would
result as bond payment liability is dependent
upon Minnesota statute Chapter 429 special
assessments.
Motion to approve Resolution 91-05 calling for
Public Sale of $525,000.00 G.O. Improvement
Bonds of 1991.
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
PRIOR LAKE, MINNESOTA
HELD: February 4, 1991
Pursuant to due call and notice thereof, a regular meeting
of the City Council of the City of Prior Lake, Scott County,
Minnesota, was duly called and held at the City Hall in said City
on Monday, the 4th day of February, 1991, at ~ o'clock l.M.
The following members were present:
and the following were absent:
Member t;-k) / S wfl
resolution and moved its adoption:
introduced the following
Resolution Number 91-05
RESOLUTION PROVIDING FOR PUBLIC SALE
OF $525,000
GENERAL OBLIGATION IMPROVEMENT BONDS OF 1991
BE IT RESOLVED by the City Council of the City of Prior
Lake, Minnesota, as follows:
1. Findina: Amount and PurDose. It is hereby found,
determined and declared that this City should issue $525,000
General Obligation Improvement Bonds of 1991 (the "Bonds") to
finance the construction of various improvements in the City.
2. ApDointment of Financial Advisor. The City Council does
hereby appoint Juran' Moody, Inc., in st. Paul, Minnesota, to
act as its financial advisor to the City for the sale of the
Bonds.
3. Meetinq. This Council shall meet at the time and place
specified in the form of notice hereinafter contained for the
purpose of opening and considering sealed bids for, and awarding
the sale of, the Bonds.
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4. Notice of Bond Sale. The City Manaqer is hereby
authorized and directed to cause notice of the time, place and
purpose of said meeting to be published in the official newspaper
of the City and in Northwestern Financial Review not less than
ten (10) days in advance of date of sale, as provided by law,
which notice shall be in sUbstantially the form set forth in
Exhibit A attached hereto.
5. Official Terms of Bond Sale.
of said Bonds and the sale thereof are
"Official Terms of Bond Sale" attached
incorporated herein by reference.
The terms and conditions
fully set forth in the
hereto as Exhibit Band
6. Official statement. The City Manager and Finance
Director and other officers or employees of the City are hereby
authorized to participate in the preparation of an official
statement for the Bonds.
The motion for the adoption
duly seconded by member
discussion thereof and upon a vote
following voted in favor thereof:
of the foregoing resolution was
and, after full
being taken thereon, the
and the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted.
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STATE OF MINNESOTA
COUNTY OF SCOTT
CITY OF PRIOR LAKE
I, the undersigned, being the duly qualified and acting
Manager of the City of Prior Lake, Minnesota, DO HEREBY CERTIFY
that I have carefully compared the attached and foregoing extract
of minutes with the original minutes of a meeting of the City
Council held on the date therein indicated, which are on file and
of record in my office, and the same is a full, true and complete
transcript therefrom insofar as the same relates to the proposed
sale of $525,000 General Obligation Improvement Bonds of 1991 of
said City.
WITNESS my hand as such Manager and the official seal of the
City this ____ day of
, 1991.
City Manager
( SEAL)
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EXHIBIT A
NOTICE OF BOND SALE
$525,000
CITY OF PRIOR LAKE
SCOTT COUNTY
MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS OF 1991
Sealed bids on these bonds will be opened and considered for
award on Monday, March 4, 1991, at 7:00 P.M., Central Time, by
the City Council at the City Hall in Prior Lake, Minnesota. The
bonds will be dated March 1, 1991 and interest will be payable
December 1, 1991 and semiannually thereafter. The Issuer will
designate the bonds as qualified tax-exempt obligations. The
bonds will mature on December 1 in the years and amounts as
follows:
~
Amount
Iul:
Amount
1992-1994
1995-2000
$50,000
45,000
2001-2005
2006-2008
$15,000
10,000
All dates are inclusive.
An approving legal opinion will be furnished by Briggs and
Morgan, Professional Association, of st. Paul and Minneapolis,
Minnesota. The proceeds will be used to finance the construction
of various improvements in the City.
Bidders should be aware that the Official Terms of Bond Sale to
be published in the Official Statement for the sale may contain
additional bidding terms and information relative to the Issue.
In the event of a variance between statements in this Notice of
Bond Sale and said Official Terms of Bond Sale the provisions of
the latter shall be those to be complied with.
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Dated: February 4, 1991
BY ORDER OF THE CITY COUNCIL
/s/ David Unmacht
City Manager
Additional information
may be obtained from:
JURAN & MOODY, INC.
Minnesota Mutual Life Building
400 North Robert Street
Suite 800
St. Paul, Minnesota 55101-2091
Telephone No.: (612) 224-1500
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EXHIBIT B
OFFICIAL TERMS OF
BOND SALE
$525,000
GENERAL OBLIGATION IMPROVEMENT BONDS OF 1991
CITY OF PRIOR LAKE
SCOTT COUNTY
MINNESOTA
NOTICE IS HEREBY GIVEN that these bonds will be offered for sale
according to the following terms:
TIME AND PLACE:
Sealed bids for these bonds will be
opened and considered for award on
Monday, March 4, 1991, at 7:00
P.M., Central Time, by the City
Council at the City Hall in Prior
Lake, Minnesota.
TYPE OF BONDS:
Fully registered general obligation
bonds, $5,000 or larger denomina-
tions at the option of the bidder.
DATE OF ORIGINAL
ISSUE OF BONDS:
March 1, 1991.
PURPOSE:
INTEREST PAYMENTS:
To finance the construction of
various improvements in the City.
December 1, 1991, and semiannually
thereafter on June 1 and
December 1.
MATURITIES:
December 1 in each of the years and
amounts as follows:
XUI:
Amount
1992-1994
1995-2000
2001-2005
2006-2008
$50,000
45,000
15,000
10,000
All dates are inclusive.
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REDEMPTION:
BOND REGISTRAR:
At the option of the Issuer, bonds
maturing on or after December 1,
1997 shall be subject to prior
payment, on December 1, 1996 and
any interest payment date there-
after, at a price of par and
accrued interest. Redemption may
be in whole or in part of the bonds
subject to prepayment. If
redemption is in part, the bonds
remaining unpaid which have the
latest maturity date shall be
prepaid first and if only part of
the bonds having a common maturity
date are called for prepayment the
specific bonds to be prepaid shall
be chosen by lot by the Registrar.
The successful bidder will name the
Registrar and paying agent which
shall be subject to applicable SEe
regulations and to the approval of
the Issuer. Principal will be
payable at the main corporate
office of the Registrar and
interest will be payable by check
or draft of the Registrar mailed to
the registered holder of the bond
at his address as it appears on the
books of the Registrar. The Issuer
will pay reasonable and customary
charges 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 shall
constitute cause for a failure or
refusal by the Purchaser thereof to
accept delivery of and pay for the
bonds in accordance with terms of
the purchase contract. The CUSIP
Service Bureau charge for the
assignment of CUSIP identification
numbers shall be paid by the
Purchaser.
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DELIVERY:
Forty days after award subject to
approvinq leqal opinion of Briqqs
and Morqan, Professional
Association, of st. Paul and
Minneapolis, Minnesota. Bond
printinq and legal opinion will be
paid by the Issuer and delivery
will be anywhere in the continental
united states without cost to the
Purchaser. Leqal opinion will be
printed on the bonds at the request
of the successful bidder.
TYPE OF BID:
Sealed bids of not less than
$515,550 and accrued interest on
the principal sum of $525,000 from
date of original issue of the bonds
to date of delivery must be filed
with the undersiqned prior to the
time of sale. Bids must be uncon-
ditional except as to 1eqality. A
certified or cashier's check in the
amount of $10,500 payable to the
order of the Finance Director of
the Issuer must accompany each bid,
to be forfeited as liquidated
damages if bidder fails to comply
with accepted bid. Bids for the
bonds should be addressed to:
RATES:
Ralph Teschner
Finance Director
City Hall
4629 Dakota Street Southeast
Prior Lake, MN 55372
All rates must be in integral
multiples of 1/20th or 1/8th of 1'.
No limitation is placed upon the
number of rates which may be used.
All bonds of the same maturity must
bear a sinqle uniform rate from
date of issue to maturity and no
rate of any maturity may be lower
than the highest rate applicable to
bonds of any precedinq maturities.
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INFORMATION FROM
PURCHASER:
The successful purchaser will be
required to provide, in a timely
manner, certain information
relating to the initial ottering
price of the bonds necessary to
compute the yield on the bonds
pursuant to the provisions of the
Internal Revenue Code of 1986, as
amended.
QUALIFIED TAX
EXEMPT OBLIGATIONS:
The Issuer will designate the bonds
as qualified tax exempt obligations
for purposes of Section 265(b) (3)
of the Internal Revenue Code of
1986, as amended.
Award will be made solely on the
basis of lowest dollar interest
cost, determined by addition of any
discount to and deduction of any
premium from the total interest on
all bonds from their date to their
stated maturity.
The Issuer reserves the right to reject any and all bids, to
waive informalities and to adjourn the sale.
AWARD:
Dated: February 4, 1991
BY ORDER OF THE CITY COUNCIL
Isl David Unmacht
City Manager
Additional information
may be obtained from:
JURAN , MOODY, INC.
Minnesota Mutual Life Building
400 North Robert street
Suite 800
st. Paul, Minnesota 55101-2091
Telephone No.: (612) 224-1500
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