5b. Providing for Sale of GO Bonds Series 2012A0
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
MEMORANDUM
TO: Mayor
City Council Members y�
FROM: Greg Sticha, Finance Director
DATE: September 10, 2012 pt�
SUBJ: Approval of Resolution Providing for the Sale of $1,245,000
General Obligation Water & Sewer Revenue Bonds, Series 2012A
PROPOSED MOTION
"The City Council approves a resolution providing for the Sale of $1,245,000
General Obligation Water & Sewer Revenue Bonds to finance meter reading
equipment in the city."
Approval of this' requires a simple majority vote of the City Council..
BACKGROUND
Earlier this year, staff discussed the need to purchase new water meter reading
equipment for the city. Staff has researched the financing of these meters with
Ehlers & Associates, the city's financial advisors. After those discussions, staff
believes there will be little or no impacts on rate projections from the rate study
in the previous year. Staff will present the new rate study for setting 2013 rates
at the second meeting in October, and staff will continue to look for cost saving
measures that would result in additional positive impacts on utility rates in
upcoming years.
Planning & RECOMMENDATION
Natural Resources
Phone: 952.227.1130 Staff recommends that the City Council adopt a resolution providing for the sale
Fax: 952.227.1110 of $1,245,000 General Obligation Water & Sewer Revenue Bonds, Series 2012A, to
finance the purchase of radio read equipment as discussed in prior work session
Public Works
7901 Park Place meetings.
Phone: 952.227.1300
Fax: 952.227.1310 ATTACHMENTS
Senior Center 1. Resolution
Phone: 952.227.1125 2. Pre Sale Report
Fax: 952.227.1110
Web Site
www.ci.chanhassen.mn.us
f\gregs \bondmg\2012 bonding \call for sale memo 9- 10.docx
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
Sb
Resolution No.
Council Member
introduced the following resolution and moved its adoption:
Resolution Providing for the Sale of
$1,245,000 G.O. Water and Sewer Revenue Bonds, Series 2012A
A. WHEREAS, the City Council of the City of Chanhassen, Minnesota, has heretofore determined that it
is necessary and expedient to issue the City's $1,245,000 G.O. Water and Sewer Revenue Bonds,
Series 2012A (the "Bonds "), to finance meter reading equipment in the City; and
B. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, 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 the City of Chanhassen, Minnesota, as
follows:
1. Authorization; Findings The City Council hereby authorizes Ehlers to solicit proposals for the sale
of the Bonds.
2. Meeting; Proposal Opening The City Council shall meet at 7:00 p.m. on September 24, 2012, for the
purpose of considering sealed proposals for and awarding the sale of the Bonds.
3. 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
and, after full discussion thereof and upon a vote being taken thereon, the
following Council Members voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
Dated this l O th day of September, 2012.
City Clerk
Debt issuance Services
September 10, 2012
Pre -Sale Report for
$1,245,000 General Obligation Water and
Sewer Revenue Bonds, Series 2012A
City of Chanhassen, Minnesota
Prepared and Presented by:
Mark Ruff
Financial Advisor, CIPFA
Jessica Cook
Financial Advisor
EHLERS
LEADERS IN PUBLIC FINANCE
Minnesota phone 651- 697 -8500
Offices also in Wisconsin and Illinois fax 651- 697 -8555
toll free 800- 552 -1171
www.ehiers- inc.com
3060 Centre Pointe Drive
Roseville, MN 55113-1122
n n D eb t Issuance Services
Executive Summary of Proposed Debt
Proposed Issue:
$1,245,000 General Obligation Water and Sewer Revenue Bonds,
Series 2012A
Authority:
The Bonds are being issued pursuant to Minnesota Statues, Chapter
444 and 475. Because the City paying 100% of the debt service from
utility revenues, the Bonds can be a general obligation without a
referendum and will not count against the City's debt limit.
Purposes /Funding Sources:
The proposed issue includes financing for meter reading equipment
for the the water and sewer utilities with water revenues paying for
approximately 70% of debt service and sanitary sewer for 30% of the
debt service. The water utility portion of the debt was included in the
most recent rate study.
Term /Call Feature
The Bonds are being issued for a 10 year term. Principal on the
Bonds will be due annually on February 1, 2014 through 2023.
Interest is payable every six months beginning August 1, 2013.
The Bonds maturing February 1, 2022, and thereafter will be subject
to prepayment at the discretion of the City on February 1, 2021 or any
date thereafter.
Bank Qualification
Because the City is issuing less than $10,000,000 in the calendar
year, the City will be able to designate the Bonds as "bank qualified"
obligations. Bank qualified status broadens the market for the Bonds,
which can result in lower interest rates.
Rating:
The City's most recent bond issues were rated "AAA" by Standard
and Poor's, the highest possible rating for municipal debt.
Method of Sale /Placement:
In order to obtain the lowest interest cost to the City, we will solicit
competitive bids for purchase of the Bonds from local banks in your
area and national /regional underwriters.
We have included an allowance for discount bidding equal to 1.0% of
the principal amount of the issue. The discount is treated as an
interest item and provides the underwriter with all or a portion of its
compensation in the transaction.
If the Bonds are purchased at a price greater than the minimum bid
amount (maximum discount), the unused allowance may be used to
lower your borrowing amount.
Risk Considerations:
If utility revenues are not adequate to pay debt service, the City will
be required to pay from any available source including property
taxes.
Presale Report September 10, 2012
City of Chanhassen, Minnesota Page 1
■�■ n Debt Issuance Services
Review of Existing Debt:
We have reviewed all outstanding indebtedness for the City and find
one bond issue callable on February 1, 2013 that the City can prepay
at that time.
We will continue to monitor the market and the call dates for the
City's outstanding debt and will alert you to any future refunding
opportunities.
Continuing Disclosure:
Because the City has more than $10,000,000 in outstanding debt
(including this issue) and this issue is over $1,000,000, the City will
be agreeing to provide certain updated Annual Financial Information
and its Audited Financial Statement annually as well as providing
notices of the occurrence of certain "material events" to the
Municipal Securities Rulemaking Board (the "MSRB "), as required
by rules of the Securities and Exchange Commission (SEC). The
City is already obligated to provide such reports for its existing
bonds, and has contracted with Ehlers to prepare and file the reports.
Arbitrage Monitoring:
Because the Bonds are tax- exempt securities /tax credit securities, the
Issuer must ensure compliance with certain Internal Revenue Service
(IRS) rules throughout the life of the issue. These rules apply to all
gross proceeds of the issue, including initial bond proceeds and
investment earnings in construction, escrow, debt service, and any
reserve funds. How issuers spend bond proceeds and how they track
interest earnings on funds (arbitrage /yield restriction compliance) are
common subjects of IRS inquiries. Your specific responsibilities will
be detailed in the Nonarbitrage Certificate prepared by your Bond
Attorney and provided at closing. We recommend that you regularly
monitor compliance with these rules and/or retain the services of a
qualified firm to assist you.
Presale Report September 10, 2012
City of Chanhassen, Minnesota Page 2
D eb t I ssuance Services
Proposed Debt Issuance Schedule
Pre -Sale .Review by Council:
Distribute Official. Statement:
Conference with Rating Agency:
City Council Meeting to Award Sale of the Bonds
Estimated. Closing Date:
Attachments
Sources and Uses of Funds
Proposed Debt Service Schedule
Resolution Authorizing Ehlers to Proceed. With Bond Sale
Ehlers Contacts:
September 10, 2012
September 14, 2012
September 17, 2012
September 24, 2012
On or about October 14, 2012
Financial Advisors:
Mark Ruff
(651) 697 -8505
Jessica Cook
(651) 697 -8546
Bond Analyst:
Pia Troy
(651) 697 -8545
Bond Sale Coordinator:
Alicia Aulwes
(651) 697 -8523
Financial Analyst:
Alicia Gage
(651) 697 -8551
The Official Statement for this financing will be mailed to the Council Members at their home address or
e- mailed for review prior to the sale date.
Presale Report September 10, 2012
City of Chanhassen, Minnesota Page 3
Chanhassen, Minnesota
$1,245,000
General Obligation Water and Sewer Bonds, Series 2012
Assumes current market BQ AAA rates plus 35 bps
Sources & Uses
Dated 10/01/2012 1 Delivered 10/0112012
Sources Of Funds
Par Amount of Bonds
_ $1,245,000.00
Total Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . ... . . . . . ..... . ...... . . . ... $1,245,000.00
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ..... ...............................
Uses Of Funds
Deposit to Project Construction Fund
1,200,000.00
Costs of Issuance
....................................... ............................... .........................................................................................................................................................................................................................................._.....................................................
32,500.00
.I.............................
Total Underwriter's Discount (1.000 %)
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,450.0
Rounding Amount
50.00
Total Uses $1,245,000.00
Series 2012 GO Water & Se I SINGLE PURPOSE 1 8/27/2012 1 5:04 PM
IS EHLERS
LEADERS IN PUBLIC FINANCE
Chanhassen, Minnesota
$1,245,000
General Obligation Water and Sewer Bonds, Series 2012
Assumes current market BQ AAA rates plus 35 bps
Debt Service Schedule
Date
Principal
Coupon
Interest
Total P +I
Fiscal Total
10/01/2012
-
-
08/01/2013
-
-
15,227.08
15,227.08
-
02/01/2014
115,000.00
0.700%
9,136.25
124,136.25
139,363.33
08/01/2014
-
-
8,733.75
8,733.75
-
02/01/2015
120,000.00 . . . . . . . ..........................
0.800%
. ..... ...... . . ....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,733.75
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128,733.75
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137,467.50
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............................
08/01/2015
-
-
8,253.75
8,253.75
-
02/01/2016
120,000.00
0.900%
8,253.75
128,253.75
136,507.50
08/01/2016
-
-
7,713.75
7,713.75
-
02/01/2017
120,000.00
1.100%
7,713.75
127,713.75
135,427.50
08/01/2017
-
-
7,053.75
7,053.75
-
02/01/2018
125,000.00
1.350%
7,053.75
132,053.75
139,107.50
08/01/2018
-
-
6,210.00
6,210.00
-
02/01/2019
125,000.00
1.550%
6,210.00
131,210.00
137,420.00
08/01/2019
-
-
5,241.25
5,241.25
-
02/Ol/2020
125,000.00
1.850%
5,241.25
130,241.25
135,482.50
08/01/2020
-
-
4,085.00
4
-
02/01/2021
130,000.00
1.950%
4,085.00
134,085.00
138,170.00
08/01/2021
-
-
2,817.50
2,817.50
-
02/01/2022
130,000.00
2.050%
2,817.50
132,817.50
135,635.00
08/01/2022
-
-
1,485.00
1,485.00
-
02/01/2023
13 5,000.00
2.200%
1,485.00
136,485.00
137,970.00
Total $1,245,000.00 $127,550.83 $1,372,550.83
Yield Statistics
Bond Year Dollars $7,420.00
Average Life ........................... ............................._. 5.:.9.6'.0 Years
. . . . . .. ... . . . . . . . . . . . . . .. . . . . . . . . . . .
Average Coupon 1.7190139%
Net Inter Cost (NIC) 1.8868036%
......................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................. . . . . . . . . . . . . . . . ......................
. . . . . . . . . . . . . . . . . o . . . . .
True Interest Cost (TIC) 1.8885108/0
BondYield for Arbitrage Purposes ........................................................................................................................................................................................................................................... .......................I....... .................1:7091,132 %..
All Inclusive Cost (AIC) 2.3685868%
IRS Form 8038
Net Interest Cost 1.7190139%
........... ........ . ......... ......... .................
WeightedAverage Maturity .......................................................................................................................................................................................................................................................... ............................... ........................_ Years I .
Series 2012 GO Water & Se I SINGLE PURPOSE 1 8/27/2012 1 5:04 PNI
EHLERS
LEADERS IN PUBLIC FINANCE
Chanhassen, Minnesota
$1,245,000
General Obligation
Water and Sewer Bonds, Series 2012
Assumes current
market BQ AAA rates plus 35 bps
Debt Service
Schedule
Sewer
Date
Principal
Coupon
Interest
Total P +I
Water (70 %)
(30 %)
Fiscal Total
10/01/2012
-
08/01/2013
-
-
15,227.08
15,227.08
10,658.96
4,568.12
-
02101/2014
115,000.00
0.707%
9,136.25
124,136.25
86,895.38
37,240.88
139,363.33
08/01/2014
-
-
8,733.75
8,733.75
6,113.63
2,620.13
-
...... .............. ...........................
000 :: 00 .... .............................
00 ...... ..... ...............................
8 . 733 : 75 .............. ...........................
...... ...............................
.... 90 . 1 . 13 : 63 .................
....
... 38.620.13
... ......... ....................
137,467.50
08/01/2015
-
-
8,253.75
8,253.75
5,777.63
2,476.13
............
-
02/01/2016
120,000.00
0.900%
8,253.75
128,253.75
89,777.63
38,476.13
136,507.50
08/01/2016
-
-
7,713.75
7,713.75
5,399.63
2,314.13
-
02/01/2017
120,000.00
1.100%
7,713.75
127,713.75
89,399.63
38,314.13
135,427.50
08/01/2017
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . ...........................................
-
. . . . . . . . . . . . . . . . . . . . . . . .
7,053.75
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,053.75
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,937.63
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,116.13
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
02/01/2018
125,000.00
1.350%
7,053.75
132,053.75
92,437.63
.t . . . -.1.1- . . . . . . . . .
39,616.13
........... . ...... ...... ... . . . . . . . . . . . . . . . . . . . . . . .
139,107.50
08/01/2018
-
-
6,210.00
6,210.00
4,347.00
1,863.00
-
02/01/2019
125,000.00
1.550%
6,210.00
131,210.00
91,847.00
39,363,00
137,420.00
08/01/2019
-
-
5,241.25
5,241.25
3,668.88
1,572.38
-
02/01/2020
125,000.00
1.850%
5,241.25
__,_ 130,24] 25
,._ 91,16888
39,072.38
135,482.50
08/01/2020
-
4,085.00
4,085.00
2,859.50
1,225.50
-
02/01/2021
130,000.00
1.950%
4,085.00
134,085.00
93,859.50
40,225.50
138,170.00
08/01/2021
-
-
2,817.50
2,817.50
1,972.25
845.25
-
02/01/2022
130,000.00
2.050%
2,817.50
132,817.50
92,972.25
39,845.25
135,635.00
08/01/2022
....................... ...............................
-
..................................................................
- ...............................
1,485.00
1,485.00
1,039.50
445.50
-
02/01/2023
135,000.00
2.200%
...........................................................--....................................................................................
1,485.00
136,485.00
...................................................
95,539.50
....................
40,945.50
.......... ...
............................
137,970.00
Total
$ 1,245,000.00
-
$127,550.83
$1,372,550.83
$960,755.58
$411,765.2
-
Yield Statistics
Bond Year Dollars
................................................................................................................................................................................................................................................................................................................................................................................................................................................................
$7,420.00
Average Life
...............................
5.960 Years
Net Interest Cost (NIC) _.... _.....__... _...._. ___. _._.. ____. ........... ....... 1.8868036%
True lnterest (TIC) I I .................................... ............ ................................... . ......... ....._.......... ......... .......... ......... 1.8885108% 111.1 Bond Yield for Arbitrage Purposes .................................................................................................................................................................................................................................................. ............................... 1.7091132%
All Inclusive Cost AIC ......... ...... ..... ... .. ........
.... (.......) __. ............. __... _..__. ____ _..... ..... 2.3685868%
IRS Form 8038
Net Interest Cost
.............. __... ............ 1.7190139%
............ __.__.. .......... 1.7190139%
Weighted Avem a Matun __..._ . .................. .._..... ..._......... ___.._......
...._.. B tY _._........... .......... ____. _..... 5 Years
Series 2012 GO Water 8 Se I SINGLE PURPOSE I W7/2012 1 5:04 PM
IS EHLERS
LEADERS IN PUBLIC FINANCE