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Home My WebLink About8A - Sale of $1,065,000 G.O. Improvement Bond of 1997 AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: DISCUSSION: ST AFF AGENDA REPORT 8A RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROVAL OF RESOLUTION AUTHORIZING PUBLIC SALE OF $1,065,000 IMPROVEMENT BONDS OF 1997 SEPTEMBER 15, 1997 97-XX G.O. The City's bond and fiscal consultant Steve Mattson from Juran & Moody will be present during the Council meeting to request Council approval for a public sale of bonds in the amount of $1,065,000 to finance improvements associated with Pike Lake Trail (Project 97-17), Mushtown Road (Project 95-07) and the city's cooperative agreement share of County Road 42 improvements. The City Council approved Resolution 97-11 on March 3, 1997 which accepted the feasibility report for a number of projects identified for construction during 1997 which were to be financed by a combination of general obligation bonds and various fund appropriations. A summary of those improvements are listed below: Project Description Project Financing 1. Pike Lake Trail G.O. Bonds (Trunk Reserve) (MSA Funds) G.O. Bonds G.O. Bonds (Trunk Reserve) $366,000.00 $33,000.00 $118,000.00 $378,000.00 $321,000.00 $318,000.00 2. Mushtown Road 3. CSAH 42 Upgrade Bond Total... $1,065,000.00 Subsequently, the public hearing for these 1997 improvement projects was conducted on April 7, 1997 and Resolution 97-24 ordering the respective improvements was approved. Also, Resolution 97-70 was approved by the City Council on August 18, 1997 which awarded the construction bid to McNamara Contracting Inc. The structure of the bond Issue itself would be based upon the following components: Pike Lake Trail Estimated Construction Engineering (18%) $286,000.00 51,420.00 16200 Eagle Creek Ave. S.E.. Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQl'AL OPPORTLCiIT'{ E"'1PLOYER HIBONDS\A97BONDS.DOC Administration (5%) Financing (5%) Mush Town Road Estimated Construction Engineering (12%) Administration (5%) Financing (5%) CSAH 42 Estimated Construction Engineering (7.4%) Financing (5%) TOTAL... 14,300.00 14.280.00 $366,000.00 $311,000.00 35,925.00 15,550.00 15.525.00 $378,000.00 $285,600.00 21,140.00 14.260.00 $321,000.00 $1,065,000.00 The above financing expenses represent approximately 5% of the construction amount and are detailed below: Bond Registration ... Bond Counsel... Bond Rating ... Fiscal Fee ... Discount Factor (1.80%) ... Capitalized Interest ... Rounding ... Subtotal... 1,625.00 4,000.00 5,500.00 13,500.00 19,170.00 0.00 270.00 $44,065.00 Approximately 44% of the bonds will be recovered through special assessments. The remainder of the bonds will be levied against the overall property taxes within the City. If bid today, a net effective interest rate of 5.15% with an average bond coupon rate of 4.85% would probably be a close estimate. The minimum interest rate of 8%, as per the City Assessment Policy, is to be charged on the Pike Lake Trail and Mushtown Road assessments. The bond issue is to be dated 11/1/97 and will be structured 10 years in length. The following is a schedule of tax levies/assessment terms and their corresponding amounts necessary to amortize the bond debt: 10/20 year assessment stream 10 year property tax levy Total... $465,000.00 $600.000.00 $1,065,000.00 Attached is a worksheet from Juran & Moody which provides additional detail with respect to debt service principal/interest H:\BONDS\A97BONDS.DOC payments, projected assessment stream and annual special tax levies necessary to subsidize this bond issue . The second page lists the estimated coupon and net effective interest rates for this bond issue plus it identifies the financing costs and other miscellaneous information. ALTERNATIVES: The following alternatives are available to the City Council: 1. Approve Resolution 97-XX Authorizing Public Sale of $1,065,000 General Obligation Improvement Bonds of 1997. 2. Delay financing to a future time as determined by the City Council. FINANCIAL IMPACT: The estimated special tax levy calculation associated with this bond issue has already been factored in along with the City's proposed general fund operating budget levy, revolving equipment fund levy and other special debt levies for payable 1998 property taxes. These levies are projected to keep taxes flat for 1998 with the exception of the park referendum debt levy. RECOMMENDATION: Staff would recommend the City Council to approve Resolution 97- XX Authorizing Public Sale of $1,065,000 General Obligation Bonds of 1997. Steve Mattson will be present at the meeting to discuss the resolution and answer any questions the Council may have with respect to the bond issuance process. ACTION REQUIRED: Motion and second to approve Resolution 97-XX Authorizing Public Sale of $1,065,000 General Obligation Improvement Bonds of 1997. L Attachments DATE OF ANALYSIS: Scp-8-l997 Name of Issuer CITY OF PRIOR LAKE. ~Ul'o'NESOT A PRELIM. SALE ANAL YSIS DAnD DATE OF BOND ISSUE: Jun. 1-1996 Type of Bond GEl'o"ERAL OBLIGATION L"lI'ROVEME"IT BONDS OF 1997 II RLE: PRIOR L\KE ~29 97,\ P.\R .-\.\tOl!i\T: SI.065.ooo.oo RESlDB<TL-'.L HOMESTE-ill .\NNliAL L\X \IARKET V.-\Ll:E EST. TOTAL STATl;.UORY C.-'.PITAUZED .\~SESS~lThTS -'.."~AL nx C..\PAClTI C..\PACHY 585.IXI() 5110.000 SI25.000 SISO.OOO (12-1) INTEREST DEBT COVER....\(jE INTEREST ASSESS\lThT I N'fEREST ,~ \SSESS~IE'-T [AX I."T;S~D SLRPLlJS C'l~ILn_ATIVE VALUEI!\CR RATE NETT.-\X C\PACITY YEAR PRI!\ClPAL RATES INTEREST SERVICE \!l 105.00% o \IONfHS PRlNClP..\1. K(Kl% INCOME LEVY OISCOl 'N[ DEBClT BAL\i'iCE 2.00% INCRE.ASE $980 $U80 Si.780 $2.280 1997 0.00 0.00 SO 110 SO 00 SO 00 9.687.5-12 19'1H S 100.000.00 ~.IO% 53.576.25 153.576.25 161.255.06 S-kl,50000 $-40.3IXWO $868(1() m 75.8000() 000 I .3+1 ~~ 1.3+1~~ ~.881.193 0.77% $7.55 $II.JI) SI3.71 517.56 :00.00000 .t20% ~5.355.00 1~5.355.oo 152,622.75 46500 m J3.-ISUOO 79,980,lJO 75.8<XI.00 000 3.15725 ~502.19 10.078.919 0.75% 7.35 IlIO 13.35 1710 100.000.00 ~.30% ~1.l55<X) l~lI55oo 1~.212.75 46 500 00 29,7btJ,OO 76.160.00 75.800.00 ll.otJ 3.847.25 8.3~~+I IO.280AY7 0.7..1% 7.25 10.95 13.17 16.87 .. .~IJ 100.000.00 4.-10% 36.855.00 136.85500 1-0.697.75 -l6.5(Xl.OO Z6.fJ...Kl,OO 72. 5.J{) 00 75.8<lO 00 000 -l.642.25 12.9'Jl.69 10.-186.107 0.72% 7.06 1066 12.~J2 16.-U 2002 100.000.00 ~bO% 32A55.00 132A55 00 139.077.75 46. 500. lXl Z2.320.00 68,S201X} 75.8<lO.00 O.IXI 5.5-12.25 18.53394 10.695.829 0.7[% 6.% 1051 12.6-' 161~ 2003 100.000.00 -1.75% 27.855.00 127.855.00 15-l.2~7.75 46.500 !.Xl 18.60000 65.1001lO 75.800.LXI O()() 6.652.25 25.18619 1O.9m.7-16 0.69% 6.76 1021 12.28 15.73 20U4 100.000.00 ..1.85% 23.10500 123.10500 129.26025 46,500(,0 1~.llllO.OO 61.380.00 75.llOOLXI 000 7.919.75 33.10594 11.127.9~1 068% 6.66 10.116 12.10 15.SO ZOOS 115.000.00 ~.95% 18.255.00 133.255.00 139.917.75 -l6.500()() 11.160.00 57.660 00 7580000 000 (6A5775) 26,648.19 11.350.500 0.67% 6.57 992 1193 1528 1006 125.000.00 5.00% 12.562.50 137.562.50 1-14.=63 -l6.500 LXI 7.+lO.(lO 53.9.J1100 75.80000 0.00 (I~7LX)63) 11.9~75b 11.577.510 0.65% 6.37 9.62 11.57 I~ 82 ~o(n 125.000.00 5.05% 6.312.SO 131.312.50 137.lf78.13 -K>.50000 3.720 <XI 50,2:000 75.8<JO.00 o LXI ( 11.85813) 8~A3 11.809.060 0.6-'% 6.27 9.~7 11.39 1~.59 Z008 0.00 0.00% 0.00 um o IX) O.(X) 000 0,00 0.00 000 0.00 89~3 12.lJ.t5.2~1 o.(X)% om 0.00 0.00 0.00 2009 0.00 0.00% 0.00 0.00 0.00 000 OllO O()(l O.LX) OllO 000 8~~3 12.:86.1-16 0.00% 0.00 0.00 0.00 0.00 2010 0.00 0.00% 0.00 O(lO O.LXI O.t..O 0.0:.) OUO 0.00 0.00 000 89 ~3 12.53186~ 0.00% 0.00 0.00 0.00 000 201 I 0.00 0.00% O.LXI 000 0.00 (},l.o 000 0.00 D.DO 000 O.IX) 89~3 12.7H2.506 0.00% 000 0.00 0.00 0.00 2012 0.00 0.00% 0.00 000 000 000 o <Xl 000 0.00 0.00 000 89.~3 13.038.156 0.00% 0.00 000 0.00 0.00 2013 000 0.00% 0.00 0.00 0.00 OlIO 0.00 (Jrx) 0.00 000 000 89 ~3 13.298.919 0.00% o LXI 0.00 0.00 O()(I :Ol~ 0.00 0.00% 000 0.00 000 Ol() OlXl 1),00 0.00 000 OIl() 8~~3 13.56-1.897 0,00% 000 0.00 0.00 0.00 2015 0.00 0.00% 0.00 000 000 O.l.() 0.00 o <Xl 000 0.00 OIl() 8~ ~3 13.836195 (1.00% 11.()(1 0.00 0.00 O.()(I 20lb 0.00 0.00% 0.00 OIl() 000 0.00 o (X) 1)IX) 0,00 O()() 000 8~ ~3 1-t,J 12.919 O(lO% 0.00 000 0.00 000 2017 O.LX) OlXl'> 0.11() 0,00 0.00 o (A) n,oo I)(XI 0.00 n,rx) 1100 89-13 I ~.395. 177 (U)O% 0.00 o IX) OW 0.00 1.065.000 00 297.-186.25 1.362.-186.25 1.~30.61057 0.00 -K>S,(X)O.(O 207.700 (Xl 672.70000 S75800000 5000 589 "3 A VG A.NNlJ.J..L I:\iCR $6.88 S 10.39 512.50 S16.01 (-) (+) IT) (T) 1+' \IONTILL Y I!'<CR 5057 SOlf7 $1lJ.t 51.33 AMOL'NT OF ADDITIONAL ASSESSlVlTh TS: S465.00000 PERCENT AGE OF ISSLJ"E ASSESSED: -0.66% li'oTEREST RATE ON ASSESSMEI'rrs: 8.00% FLRST INST ALL\lENr COLLECl'ION: 1998 , OF ANNUAL LNST AlL\lENrS: 10 START DATE OF ASSESSMENTS: 1211/97 CITY OF PRIOR LAKE. MINNESOTA GENERAL OBLIGATION IMPROVDIE:-;T BONDS OF 1997 PAR ,\~IOUNT: Sl.ObS.OOO APPLICATION OF fUNDS (ESTIMATED COSTS) CONSTRUCfION BIDS (INCLUDING ENGINEERING. ADMIN & ~I1SC) .....:.I..\KETRAIL 351.720.00 YEAR AMOUNT BONDS DATED: NOVE~IBER 1. 1997 ~I('SH TOWN ROAD 361A7500 1997 CSAH 142 306.74000 19'18 SIOO.OOO BONDS ~HTLRE: DECEMBER 1. 1998 THROUGH 1007 1999 100.000 1000 100.000 INTEREST: JUNE 1. 1998 ..\.'1D SEMLANNUALL Y THEREAFI'ER ON EACH GRAND TOTAL HARD COSTS 1.010.935.00 1001 100.000 Jl':--IE I AND DECE~IBER 1. :!OO2 100.000 1003 100.000 OPTION: ALL BO:--lDS ~L-'.TLJRlNG IN THE YEARS 1003 THROUGH 1(XJ7. ARE lcn" 100.000 CALLABLE.H THE OPTION OFTHE CITY ON DECE~lBER 1. 100-1 ADD: (SOFl' COSTS) 1005 115.000 OR ANY PAY~IENT DATE THEREAFTER AT PAR. ESTIMATED LEGAL OPINION ~.OOO.OO 1006 115.000 ESTIMATED BOND PRINTING i PUBLICATIONS 0.00 1007 115.000 ~II:--1I~IU~1 BID' S1.045.830.00 ESTIMATED REGISTRATION (1 TIME. BOOK ENTRY) 1.61500 1008 0 CAPITAL L'ITEREST (0 MONTHS) 0.00 1009 0 EST AVERAGE COU'O:--I RATE: ESTIMATED FISCAL FEE 13.500.00 1010 0 ESTIMATED BOND RATING FEE 5.500.00 lOll 0 EST. :--IE\' EFFECfIVE RA TE: /.I1SC COSTS 0.00 1012 0 ESTIlvHTED D1SCOU:--IT FACroR (1~% OF PAR) 19.170.00 1013 I) PA YlNG AGENT & 10l~ 0 REGISTRAR: FIRST NATlO:--lAL TRLJST .-\SSOCIATlON Tar AL SOFl' COSTS OF ISSUANCE -13.79500 1015 0 1016 0 BOND SALE DATE: OCTOBER 10. 1997 SUBTOTAL 1.CJ6.I.730.00 1017 0 BOND SALE OPENING. 11:30 .-\M (w THE ST. PAI:L OFFICE OF JURAN & MOODY TOT AU S1.065.000 BOND SALE A WARD: _ PM @ FIRE HALL ROUNDED FOR ISSIJANCE S1.06500000 EST BO:--lDCLOSING DATE: NOVEMBER 11. 1997 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA HELD: September 15, 1997 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 held at the City Hall in said City on Monday, the 15th day of September, 1997, at o'clock .M. for the purpose in part of authorizing a public sale of the $1,065,000 General Obligation Improvement Bonds of 1997 of said City. The following members were present: and the following were absent: Member resolution and moved its adoption: introduced the following Resolution Number 97- RESOLUTION AUTHORIZING PUBLIC SALE OF $1,065,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1997 A. WHEREAS, the City Council of the City of Prior Lake, Minnesota (the "City"), has heretofore determined that it is necessary and expedient to issue the City's $1,065,000 General Obligation Improvement Bonds of 1997 (the "Bonds"), to finance the construction of various improvements in the City; and B. WHEREAS, the City has retained Juran & Moody, in St. Paul, Minnesota ("Juran"), as its independent financial advisor for the Bonds and is therefore authorized to sell the Bonds by a private negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9): 362465.1 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake, Minnesota, as follows: 1. Authorization; Findinqs. The Council hereby authorizes Juran to solicit proposals for the sale of the Bonds. 2. Meetinq; ProposalOpeninq. This Council shall meet at the time and place specified in the Official Terms of Bond Sale attached hereto as Exhibit A for the purpose of considering sealed proposals for, and awarding the sale of, the Bonds. The City Manager, or designee, shall open proposals at the time and place specified in such Official Terms of Bond Sale. 3. Official Terms of Bond Sale. The terms and conditions of the Bonds and the negotiation thereof are fully set forth in the "Official Terms of Bond Sale" attached hereto as Exhibit A and hereby 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 Juran 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 duly seconded by member discussion thereof and upon a vote following voted in favor thereof: adoption 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. 362465.1 2 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 of said City duly called and 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 said City's $1,065,000 General Obligation Improvement Bonds of 1997. WITNESS my hand as such Manager this 15th day of September, 1997. City Manager 362465.1 3 EXHIBIT A OFFICIAL TERMS OF BOND SALE $1,065,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1997 CITY OF PRIOR LAKE SCOTT COUNTY MINNESOTA (Book Entry Only) NOTICE IS HEREBY GIVEN that these bonds will be offered for sale according to the following terms: BOOK ENTRY SYSTEM: Sealed proposals will be opened by the City Manager, or designee, on Monday, October 20, 1997, at 11:30 A.M., Central Time, at the offices of Juran & Moody, 1100 Minnesota World Trade Center, 30 East Seventh Street, in Saint Paul, Minnesota 55101-2091. Consideration of the proposals for award of the sale will be by the City Council at its meeting in the Prior Lake Fire Hall beginning at __ __ _.M., on the same day. The bonds will be issued by means of a book entry system with no physical distribution of bond certificates made to the public. The bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of 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 Issuer through First Trust National Association, in St. Paul, TIME AND PLACE: 362465.1 A-1 Minnesota (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 successful proposal maker, as a condition of delivery of the bonds, will be required to deposit the bond certificates with DTC. The Issuer will pay reasonable and customary charges for the services of the Registrar. DATE OF ORIGINAL ISSUE OF BONDS: November 1, 1997. PURPOSE: For the purpose of providing money to finance the construction of various improvements in the Issuer. INTEREST PAYMENTS: June 1, 1998, and semiannually thereafter on June 1 and December 1 to registered owners of the bonds appearing of record in the bond register as of the close of business on the fifteenth (15th) day (whether or not a business day) of the immediately preceding month. MATURITIES: December 1 in each of the years and amounts as follows: Year Amount 1998-2004 2005 2006-2007 $100,000 115,000 125,000 All dates are inclusive. Proposals for the bonds may contain a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory 362465.1 A-2 redemption in each year conforms to the maturity schedule set forth above. REDEMPTION: At the option of the Issuer, bonds maturing after December 1, 2004, shall be subject to prior payment on said date, and any interest payment date thereafter, 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. If only part of the bonds having a common maturity date are called for prepayment, the Issuer will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed. and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Notice of such call shall be given by mailing a notice thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each bond to be redeemed at the address shown on the registered books. 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. DELIVERY: Forty days after award subject to approving legal opinion of Briggs and Morgan, Professional Association, of St. Paul and Minneapolis, Minnesota. Legal opinion will be paid by the Issuer and 362465.1 A-3 .. . delivery will be anywhere in the continental United States without cost to the Purchaser at DTC. TYPE OF PROPOSAL: Sealed proposals of not less than $1,045,830 and accrued interest on the principal sum of $1,065,000 from date of original issue of the bonds to date of delivery must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality. A certified or cashier's check (the "Deposit") in the amount of $21,300, payable to the order of the Finance Director of the Issuer, or a Financial Surety Bond complying with the provisions below, must accompany each proposal, to be forfeited as liquidated damages if proposal maker fails to comply with accepted proposal. Proposals for the bonds should be delivered to Juran & Moody, and addressed to: Ralph Teschner Finance Director Prior Lake City Hall 16200 Eagle Creek Avenue Prior Lake, Minnesota 55372-1714 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 Issuer. Such bond must be submitted to Juran & Moody prior to the opening of the proposals. The Financial Surety Bond must identify each proposal maker whose Deposit is guaranteed by such Financial Surety Bond. If the bonds are awarded to a proposal maker using a Financial Surety Bond, then that purchaser is required to submit its Deposit to Juran & Moody in the form of a certified or cashier's check or wire transfer as instructed by Juran & Moody not later than 3:30 P.M., Central Time, on the next business day following the award. If such Deposit is not received 362465.1 A-4 RATES: INFORMATION FROM PURCHASER: QUALIFIED TAX EXEMPT OBLIGATIONS: CONTINUING DIS- CLOSURE UNDERTAKING: 362465.1 by that time, the Financial Surety Bond may be drawn by the Issuer to satisfy the Deposit requirement. The Issuer 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 Issuer. No proposal can be withdrawn after the time set for receiving proposals unless the meeting of the Issuer scheduled for award of the bonds is adjourned, recessed, or continued to another date without award of the bonds having been made. 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 single 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 preceding maturities. The successful purchaser will be required to provide, in a timely manner, certain information relating to the initial offering 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. The Issuer will designate the bonds as qualified tax exempt obligations for purposes of Section 26S(b) (3) of the Internal Revenue Code of 1986, as amended. The Issuer will covenant in the resolution awarding the sale of the bonds and in a Continuing Disclosure Undertaking to provide, or cause to be provided, annual financial information, including audited financial statements of the Issuer, and notices of certain A-S EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA HELD: September 15, 1997 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 held at the City Hall in said City on Monday, the 15th day of September, 1997, at o'clock .M. for the purpose in part of authorizing a public sale of the $1,065,000 General Obligation Improvement Bonds of 1997 of said City. The following members were present: and the following were absent: Member resolution and moved its adoption: introduced the following Resolution Number 97- RESOLUTION AUTHORIZING PUBLIC SALE OF $1,065,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1997 A. WHEREAS, the City Council of the City of Prior Lake, Minnesota (the "City"), has heretofore determined that it is necessary and expedient to issue the City1s $1,065,000 General Obligation Improvement Bonds of 1997 (the "Bonds"), to finance the construction of various improvements in the City; and B. WHEREAS, the City has retained Juran & Moody, in St. Paul, Minnesota ("Juran"), as its independent financial advisor for the Bonds and is therefore authorized to sell the Bonds by a private negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9): 362465.1 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake, Minnesota, as follows: 1. Authorization; Findinqs. The Council hereby authorizes Juran to solicit proposals for the sale of the Bonds. 2. Meetinq; ProposalOpeninq. This Council shall meet at the time and place specified in the Official Terms of Bond Sale attached hereto as Exhibit A for the purpose of considering sealed proposals for, and awarding the sale of, the Bonds. The City Manager, or designee, shall open proposals at the time and place specified in such Official Terms of Bond Sale. 3. Official Terms of Bond Sale. The terms and conditions of the Bonds and the negotiation thereof are fully set forth in the "Official Terms of Bond Sale" attached hereto as Exhibit A and hereby 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 Juran 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 duly seconded by member discussion thereof and upon a vote following voted in favor thereof: adoption 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. 362465 . 1 2 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 of said City duly called and 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 said City's $1,065,000 General Obligation Improvement Bonds of 1997. WITNESS my hand as such Manager this 15th day of September, 1997. City Manager 362465.1 3 EXHIBIT A OFFICIAL TERMS OF BOND SALE $1,065,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 1997 CITY OF PRIOR LAKE SCOTT COUNTY MINNESOTA (Book Entry Only) NOTICE IS HEREBY GIVEN that these bonds will be offered for sale according to the following terms: TIME AND PLACE: Sealed proposals will be opened by the City Manager, or designee, on Monday, October 20, 1997, at 11:30 A.M., Central Time, at the offices of Juran & Moody, 1100 Minnesota World Trade Center, 30 East Seventh Street, in Saint Paul, Minnesota 55101-2091. Consideration of the proposals for award of the sale will be by the City Council at its meeting in the Prior Lake Fire Hall beginning at __ __ _.M., on the same day. BOOK ENTRY SYSTEM: The bonds will be issued by means of a book entry system with no physical distribution of bond certificates made to the public. The bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of Depository Trust Company (IlDTCIl), New York, New York, which will act as securities depository of the bonds. Individual purchases of the bonds may be made in the principal amount of $5,000 or any multiple thereof of a pingle maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the Issuer through First Trust National Association, in St. Paul, A-I 362465.1 ./ Minnesota (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 DTCj 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 successful proposal maker, as a condition of delivery of the bonds, will be required to deposit the bond certificates with DTC. The Issuer will pay reasonable and customary charges for the services of the Registrar. DATE OF ORIGINAL ISSUE OF BONDS: November I, 1997. PURPOSE: For the purpose of providing money to finance the construction of various improvements in the Issuer. INTEREST PAYMENTS: June 1, 1998, and semiannually thereafter on June 1 and December 1 to registered owners of the bonds appearing of record in the bond register as of the close of business on the fifteenth (15th) day (whether or not a business day) of the immediately preceding month. MATURITIES: December 1 in each of the years and amounts as follows: Year Amount 1998-2004 2005 2006-2007 $100,000 115,000 125,000 All dates are inclusive. Proposals for the bonds may contain a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory 362465.1 A-2 redemption in each year conforms to the maturity schedule set forth above. REDEMPTION: At the option of the Issuer, bonds maturing after December 1, 2004, shall be subject to prior payment on said date, and any interest payment date thereafter, 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. If only part of the bonds having a common maturity date are called for prepayment, the Issuer will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant1s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Notice of such call shall be given by mailing a notice thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each bond to be redeemed at the address shown on the registered books. 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. , DELIVERY: Forty days' after award subject to approving legal opinion of Briggs and Morgan, Professional Association, of St. Paul and Minneapolis, Minnesota. Legal opinion will be paid by the Issuer and 362465.1 A-3 delivery will be anywhere in the continental United States without cost to the Purchaser at DTC. TYPE OF PROPOSAL: Sealed proposals of not less than $1,045,830 and accrued interest on the principal sum of $1,065,000 from date of original issue of the bonds to date of delivery must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality. A certified or cashier's check (the "Deposit") in the amount of $21,300, payable to the order of the Finance Director of the Issuer, or a Financial Surety Bond complying with the provisions below, must accompany each proposal, to be forfeited as liquidated damages if proposal maker fails to comply with accepted proposal. Proposals for the bonds should be delivered to Juran & Moody, and addressed to: Ralph Teschner Finance Director Prior Lake City Hall 16200 Eagle Creek Avenue Prior Lake, Minnesota 55372-1714 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 Issuer. Such bond must be submitted to Juran & Moody prior to the opening of the proposals. The Financial Surety Bond must identify each proposal maker whose Deposit is guaranteed by such Financial Surety Bond. If the bonds are awarded to a proposal maker using a Financial Surety Bond, then that purchaser is required to submit its Deposit to Juran & Moody in the form of a certified or cashier's check or wire transfer as instructed by Juran & Moody not later than 3:30 P.M., Central Time, on the next business day following the award. If such Deposit is not received 362465.1 A-4 RATES: INFORMATION FROM PURCHASER: QUALIFIED TAX EXEMPT OBLIGATIONS: CONTINUING DIS- CLOSURE UNDERTAKING: 362465.1 by that time, the Financial Surety Bond may be drawn by the Issuer to satisfy the Deposit requirement. The Issuer 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 Issuer. No proposal can be withdrawn after the time set for receiving proposals unless the meeting of the Issuer scheduled for award of the bonds is adjourned, recessed, or continued to another date without award of the bonds having been made. 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 single 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 preceding maturities. The successful purchaser will be required to provide, in a timely manner, certain information relating to the initial offering 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. The Issuer will designate the bonds as qualified tax exempt obligations for purposes of Section 26S(b) (3) of the Internal Revenue Code of 1986, as amended. The Issuer will covenant in the resolution awarding the sale of the bonds and in a Continuing Disclosure Undertaking to provide, or cause to be provided, annual financial information, including audited financial statements of the Issuer, and notices of certain A-S material events, as required by SEC Rule lSc2-12. AWARD: 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 proposals, to waive informalities and to adjourn the sale. Dated: September 15, 1997. BY ORDER OF THE CITY COUNCIL /s/ Frank Boyles City Manager Additional information may be obtained from: JURAN & MOODY 1100 Minnesota World Trade Center 30 East Seventh Street St. Paul, Minnesota 55101-2091 Telephone No.: (612) 224-1500 362465.1 A-6 material events, as required by SEC Rule l5c2-l2. 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 proposals, to waive informalities and to adjourn the sale. AWARD: Dated: September 15, 1997. BY ORDER OF THE CITY COUNCIL /s/ Frank Bovles City Manager Additional information may be obtained from: JURAN & MOODY 1100 Minnesota World Trade Center 30 East Seventh Street St. Paul, Minnesota 55101-2091 Telephone No.: (612) 224-1500 A-6 362465.1 1-. .;- - .. f .,t