1h Cont Disclosure Cont/Ehlers
CITY OF
CHANHASSEN
City Cmter Drive, PO Box 147
'anhæsm, Minnesota 55317
Phon, 612.937.1900
;meral Fax 612.937.5739
~n,ering Fax 612.937.9152
die Safety Fax 612.934.2524
·b www.ci.chanhæsm.mn.us
MEMORANDUM
TO:
Mayor
City Council .
Bruce M. Dejong, Finance Director@i}
October 18, 2000
.i~
Citv of Challhæsesl. A V7!willfCommunitv with clean lakes, auality schools. a charmin. downtown. thrivin. businesses. and b,autifit! Parks. A ",at olace to live. work. alld ola.
FROM:
DATE:
SUBJECT:
Continuing Disclosure Contract with Ehlers & Associates
For bond issues sold after July, 1995 the Securities and Exchange Commission
(SEC) requires that the city disclose certain information in a timely manner. To
complete this continuing disclosure, we need some assistance from Ehlers &
Associates. Enclosed is a contract outlining the options available.
I recommend that the City Council approve Option I. Mark Ruff has told me the
no charge provision means there will be no charge for continuing disclosure as
long as we continue issuing general obligation bonds annually.
October 17, 2000
Scott Botcher
City Manager
City of Chanhassen
690 City Center Drive
Chanhassen, MN 55317-0147
RE: CONTINUING DISCLOSURE REQUIREMENTS
EHLERS
& ASSOCIATES INC
Revised
Many municipal bond issues are now subject to an amendment to the Securities and Exchange Commission's
Rule 15c2-12 requiring continuing disclosure. These regulations became effective July 3, 1995 and apply to
the debt issue(s) listed below.
Issue Name
$4,500,000 General Obligation Improvement Bonds, Series 1995C
$4,880,000 General Obligation Improvement Bonds, Series 1996B
$720,000 General Obligation Water Revenue Bonds, Series 1996C
$4,365,314 General Obligation Improvement (CAB's) Bonds, Series 19960'
$4,970,000 General Obligation Park Bonds, Series 1998A
$1,325,000 General Obligation Improvement Bonds, Series 1998B
$820,000 General Obligation Water Revenue Bonds, Series 1998C
$1,225,000 General Obligation Tax Increment Bonds, Series 19980'
$1,720,000 General Obligation Tax Increment Bonds, Series 19980'
$3,410,000 General Obligation Tax Increment Refunding Bonds,Series
1998F
$2,185,000 Taxable General Obligation Tax Increment Refunding Bonds,
Series 1998G
$4,255,000 General Obligation Bonds, Series 1999A
Annual Update
Dated Date Deadline
12/01/95 12/31/00
08/01/96 12/31/00
08/01/96 12/31/00
. 08/01/96 12/31/00
06/01/98 12/31/00
06/01/98 12/31/00
06/01/98 12/31/00
08/01/98 12/31/00
08/01/98 12/31/00
08/01/98 12/31/00
08/01/98 12/31/00
12/01/99 12/31/00
These continuing disclosure regulations require certain issuers to periodically update bondholders on the status
of the municipality's financial and economic condition and report the occurrence of certain "material events.'
For the above issue(s), you entered into a full undertaking in which you are required to provide:
A. Certain updated financial information and operating data annually to all Nationally
Recognized Municipal Securities Information Repositories (NRMSIR's)
B. Notice of the occurrence of certain "material events' to all Nationally Recognized Municipal
Securities Information Repositories or with the Municipal Securities Rulemaking Board (MSRB)
and any State Information Depository ("SID") located in your state
LEADERS IN PUBLIC FINANCE
Equal Opportunity Employer
Charter Member of the Naliorlal Association
of Independent Public Fin¡IIICe Advisors
3060 Centre Poinle Drive,'Roseville, MN 55113·1105 651.697.8500 fax 651.697.8555 www.ehlers-inc.com
A. Annual Update of Financial and Operating Data
The time parameters and the information required to be updated were set forth in the Continuing Disclosure
Certificate. Please refer to each Bond Issue Summary Book for each issue for a copy of the Continuing
Disclosure Certificate. Thè updated information and a copy of your latest audited financial report must be
provided before the deadline noted above.
It is a "material evenf' if you do not provide your annual updates by the deadline. Since it is imperative that
you meet the deadline, we suggest you immediately notify your auditor of that deadline so they can complete
your audited financial statements this year and in the future in a timely manner. You will need at least four
additional copies of your audit for submission to all the repositories.
B. Notice of Occurrence of Material Events
In addition to the annual updates, you are responsible for reporting the occurrence of any of the following
material events as listed in the Continuing Disclosure Certificate.
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit of liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the securities;
7. Modification to rights of holders of the Securities;
8. Securities calls;
9. Defeasances;
10. Release, substitution or sale of property securing repayment of the Securities;
11. Rating changes;
12. Failure to provide annual financial information as required;
13. Other material event.
Other types of material events may occur in your community that may be deemed "material" to the
bondholders. If anyone of the listed events occurs in relation to the above issue or if you are unsure whether
some other "evenf' is material, please call to discuss how Ehlers & Associates may help you in assessing
whether the event is "material," in preparing the notice, and/or reporting it to the NRMSIR's or with the MSRB
and any SID located in your state.
Options for Complying with Continuing Disclosure
As your financial advisor, we offer the following options for completing continuous disclosure compliance:
1. Contract with Ehlers & Associates to collect the data for the annual update, prepare necessary
reporting documents, and submit the report according to SEC requirements on a fee basis, plus any
out-of-pocket expenses. If in any tax collection year that Ehlers & Associates, Inc. prepares an
Official Statement on behalf of the City for the sale of municipal obligations payable from the same
revenue source as the issue(s) listed above, there will be no charge for providing the annual
updating requirements that year.
2. The City of Chanhassen takes primary responsibility for annual reporting, but contracts with Ehlers
& Associates on an hourly basis plus expenses to provide specific services.
3. The City of Ché!nhassen takes complete responsibility for annual reporting and submission to the
repositories.
Please give some thought to how you will proceed with complying with these reporting requirements. Attached
is a "Contract for Continuing Disclosure Services" detailing the above three options for services.
Please mark one option, sign and retum both copies to our office in the enclosed return envelope. We will
return an executed copy to you. It is important we have a copy of all continuing disclosure contracts on file
in our offices no matter which option you choose.
Feel free to call us if you have any questions or comments on continuing disclosure or to further discuss how
we may be of service to you in complying with these new regulations.
Sincerely,
EHLERS & ASSOCIATES, INC.
C~~
Connie A. Kuck, Continuing Disclosure Coordinator
CONTRACT FOR CONTINUING DISCLOSURE SERVICES
City Council
City of Chanhassen
690 City Center Drive
Chanhassen, Minnesota 55317.-0147
The following is a contract between Ehlers & Associates, Inc. ("Ehlers") and the City of Chanhassen (the
"City") to engage Ehlers to provide ongoing continuing disclosure services for the issue(s) listed below:
· $4,500,000 General Obligation Improvement Bonds, Series 1995C
· $4,880,000 General Obligation Improvement Bonds, Series 1996B
· $720,000 General Obligation Water Revenue Bonds, Series 1996C
· $4,365,314 General Obligation Improvement (CAB's) Bonds, Series 19960'
· $4,970,000 General Obligation Park Bonds, Series 1998A
· $1,325,000 General Obligation Improvement Bonds, Series 1998B
· $820,000 General Obligation Water Revenue Bonds, Series 1998C
· $1,225,000 General Obligation Tax Increment Bonds, Series 19980'
· $1,720,000 General Obligation Tax Increment Bonds, Series 19980'
· $3,410,000 General Obligation Tax Increment Refunding Bonds, Series 1998F
· $2,185,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 1998G
· $4,255,000 General Obligation Bonds, Series 1999A
Pursuant to the terms and conditions of this contract, Ehlers will assist the City as chosen below in
complying with the requirements of the Continuing Disclosure Certificate for the bond issue(s).
A. Providing Annual Updated Financing and Operating Data
Identified below are three options available to the City for providing your annual updated financing and
operating data as required by the Continuing Disclosure Certificate that you entered into at the time
of the closing for each of the above issue(s). Please select one of the three options.
Option 1
We contract with Ehlers to provide the following Continuing Disclosure
services for any issues listed above and for all issues sold prior to the
termination of this contract for which Ehlers provided financial advisory
services:
a.
Create timetable for preparation of the Annual Report.
& ASSOCIATES INC
LEADERS IN PUBLIC FINANCE
3060 Centre Pointe Drive, Rosevi!le, MN 55113·1105
651.697.8500 fax 651.697.8555 www.ehlers-inc.com
Offices in Roseville, MN. Brookfield. WI and Naperville. IL
.
EHLERS,
b. Collect Annual Report information listed in the Continuing Disclosure Certificate and
prepare necessary reporting documents.
c. Submi.t Annual Report as required in the Continuing Disclosure Certificate.
d. Provide recommendations for future reporting.
Ehlers' fee for the above services above will be as follows:
$1,250 plus
out-of-pocket
expenses
No Charge
$200 per
Issue
Option 2. _
Option 3.
If Ehlers & Associates has not prepared an Official Statement on behalf
of the City for the sale of municipal obligations payable from the same
revenue source in the same tax collection year as the most recent issue
sold.
*No fee will be charged on the bonds to be issued in 2000.
If Ehlers & Associates has prepared in the same tax collection year as the
most recent issue sold an Official Statement on behalf of the City for the
sale of municipal obligations payable from the same revenue source.
If Ehlers & Associates has not prepared in the same tax collection year
an Official Statement on behalf of the City for the sale of municipal
obligations payable from a unique revenue source (for which special
updated continuing disclosure information is required to be collected).
We contract with Ehlers on an hourly basis of $120/hour plus out-of-pocket
expenses to provide a portion of the specific services listed in Option No.1. We
will make our request to Ehlers in writing at least 90 days prior to the date on
which we need it in order to complete and submit our report. We will complete
the remaining items listed in Option No. 1 without the assistance of Ehlers &
Associates.
We will update and submit the required information as required by the S.E.C.
without the assistance of Ehlers. If Option No.3 is selected, Ehlers assumes no
responsibility for the compilation and submission of Annual Updated Financial
and Operating Data.
PLEASE NOTE: Ehlers & Associates will assist in providing continuing disclosure requirements for any
issues for which we did not provide financial advisory services if the City and Ehlers & Associates
amend this Contract in writing by specifically listing those issues.
Contract for Continuing Disclosure Services
City of Chanhassen, Minnesota
Page 2
B. Reporting Occurrences of Material Events
Regardless of which option you choose above for providing your annual reporting requirements, Ehlers
is available to assist 'Iou with reporting the occurrence of a material event. If a material event occurs
that is specifically listed in the or that is not listed but is deemed a "material evenf' after review by the
City and Ehlers & Associates, Ehlers will determine the complexity of the event, estimate the number
of hours necessary to prepare and submit a "Notice of Continuing Disclosure Certificate Material Event"
according to S.E.C. requirements, and then estimate and negotiate a fee, if any, with you on an hourly
basis.
C. Term of Agreement
Ehlers and the City may agree in writing to amend the issues covered by this contract, the scope of
services, and the fee arrangement. This arrangement shall prevail until such time as this Contract is
terminated or amended in writing and signed to by both parties.
Fees for the above services provided by Ehlers & Associates will be billed on the first of each month
following the rendering of such service.
Respectfully submitted,
EHLERS & ASSOCIATES, INC.
The above proposal is hereby accepted by the City of Chanhassen, Chanhassen, Minnesota, by its
authorized officer this day of , 2000.
By:
Title:
Accepted by Ehlers & Associates, Inc. this
day of
,2000.
By:
Title:
Contract for Continuing Disclosure Services
City of Chanhassen, Minnesota
Page 3