1j Set Date to Sell 1998 Bonds
i.
Y-
CITY OF
CHANHASSEN
MEMORANDUM
70 City Center Drive, PO Box 147
Chanhassen, Minnesota 55317
Phone 612.937.1900
General FfIX 612.937.5739
Engineering FfIX 612.937.9152
)ublic 5aftty FfIX 612.934.2524
Wi-b www.ci.chanhassen.mn.us
TO: Don Ashworth, City Manager
FROM: Pam Snell, Finance Director ~Si
DATE: April 22, 1998
SUBJ: Approve Bond Sale Date
Staff requests approval to establish May 26, 1998 for sale of 1998 bonds.
$4,970,000 General Obligation Park Bonds, Series 1998 A
$1,325,000 General Obligation Improvement Bonds, Series 1998 B
$820,000 General Obligation Water Revenue Bonds, Series 1998 C
A Council work session is scheduled for May 2151 with David
MacGillivray with Springsted, Inc. to review these issues.
. City ofChill/htlSst1l. A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, and beautiful parks. A y,reat place to live, work, and play.
..:r:
470 Pillsbury Center
200 South Sixth Street
Minneapolis MN 55402
(612) 337-9300 telephone
(612) 337-9310 fax
e-mail: atrys@kennedy-graven.com
RECr.~~.n:~n
to_;:.t::\if ~,..:-4;
Kennedy
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CHARTER ED
CHERYL A. WILLEY
Paralegal
Direct Dial (612) 337-9235
April 21, 1998
Mr. Don Ashworth
City Manager
City of Chanhassen
P.O. Box 147
Chanhassen, Minnesota 55317
Re: $4,970,000 General Obligation Park Bonds, Series 1998A
$1,325,000 General Obligation ImprovementBonds, Series 1998B
$820,000 General Obligation Water Revenue Bonds, Series 1998C
City of Chanhassen, Minnesota
Dear Mr. Ashworth:
Enclosed are copies of the extract of minutes providing for the issuance and sale of the above
bond issues for the City Council meeting on Monday, April 27, 1998. If you have any questions,
please contact David Kennedy or myself.
Yours trUly,
(~"t~{, /{Jjwy
Cheryl A. Willey (/
Paralegal
caw
Enclosures
cc: Springsted Incorporated
WK141971
CH135-29
Extract of Minutes of Meeting
of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota
Pursuant to due call and notice thereof a regular meeting of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, was held at the City Hall in the City
on Monday, April 27, 1998, commencing at P.M.
The following members of the Council were present:
and the following were absent:
***
***
***
The following resolution was presented by Member
who moved its
adoption:
RESOLUTION NO.
RESOLUTION PROVIDING FOR THE ISSUANCE
AND SALE OF $4,970,000 GENERAL OBLIGATION
PARK BONDS, SERIES 1998A
BE IT RESOLVED By the City Council of the City of Chanhassen, Carver and Hennepin
Counties, Minnesota (City) as follows:
1. It is hereby determined that:
(a) at a duly called and regularly held special election on June 14, 1997, the voters
of the City approved the issuance and sale by the City of $4,900,000 general
obligation bonds of the City pursuant to Minnesota Statutes Chapter 475 (Act);
DJK141949
CH135-29
(b) the purpose of the bonds as approved by the voters is to provide financing for the
acquisition and betterment of City park, trail, and open space recreational facilities
(Project):
Proiect Designation & Description:
Total Proiect Cost
Referendum Amount
Allowance for Discount Bidding
Total Issue
$4,900,000
70.000
$4,970,000
(c) it is necessary and expedient to the sound financial management of the affairs of
the City to issue $4,970,000 General Obligation Park Bonds, Series 1998A
(Bonds) to provide financing for the Project.
2. To provide financing for the Project, the City will therefore issue and sell its Bonds
in the amount of $4,900,000. To provide in part the additional interest required to market the
Bonds at this time, additional Bonds will be issued in the amount of $70,000. The excess of the
purchase price of the Bonds over the sum of $4,900,000 will be credited to the debt service fund
for the Bonds for the purpose of paying interest first coming due on the additional Bonds. The
Bonds will be issued, sold and delivered in accordance with the terms of the following Official
Terms of Proposal:
DJK141949
CH135-29
..-....
- /
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$4,970,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION PARK BONDS, SERIES 1998A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 26, 1998, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted.
Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal
price and coupons, by telephone (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. All bidders are advised that each Proposal
shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
regardless of the manner of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1998, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
2002
2003
2004
$225,000
$255,000
$315,000
2005
2006
2007
$615,000
$680,000
$755,000
2008
2009
2010
$835,000
$920,000
$370,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds, provided that no serial bond may mature on or after the first mandatory
sinking fund redemption date of any term bond. All term bonds shall be subject to mandatory
sinking fund redemption and must conform to the maturity schedule set forth above at a price of
par plus accrued interest to the date of redemption. In order to designate term bonds, the
proposal must specify "Last Year of Serial Maturities" and "Years of Term Maturities" in the
spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Obligation,
representing the aggregate principal amount of the Bonds maturing in each year, will be
- i -
registered in the name of Cede & Co. as nominee of The 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 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 purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2006, and on any day thereafter, to prepay Bonds due on or
after February 1, 2007. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City 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. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. The proceeds will be used to finance
the acquisition and betterment of City park, trail, and open space recreational facilities.
TYPE OF PROPOSALS
Proposals shall be for not less than $4,900,000 and accrued interest on the total principal
amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in
the form of a certified or cashier's check or a Financial Surety Bond in the amount of $49,700,
payable to the order of the City. If a check is used, it must accompany each proposal. 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 City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City 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 City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or
1/8 of 1%. Rates must be in ascending order. Bonds of the same maturity shall bear a single
rate from the date of the Bonds to the date of maturity. No conditional proposals will be
accepted.
- ii -
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and, (Hi) reject any proposal which the City determines to have failed to comply
with the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
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 Obligation nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
. " subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven,
Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation
certificate. On the date of settlement payment for the Bonds shall be made in federal, or
equivalent, funds which shall be received at the offices of the City or its designee not later than
12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall
have been made impossible by action of the City, or its agents, the purchaser shall be liable to
the City for any loss suffered by the City by reason of the purchaser's non-compliance with said
terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
- iii -
OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent
information relative to the Bonds, and said Official Statement will serve as a nearly-final Official
Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.
For copies of the Official Statement or for any additional information prior to sale, any
prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 200 copies of
the Official Statement and the addendum or addenda described above. The City designates
the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent
for purposes of distributing copies of the Final Official Statement to each Participating
Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby
that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall
enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes
of assuring the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 27, 1998
BY ORDER OF THE CITY COUNCIL
/s/ Donald W. Ashworth
City Manager
- iv-
3. Springsted Incorporated is authorized and directed to negotiate the Bonds in accordance
with the foregoing Terms of Proposal. The City Council will meet at 6:30 p.m. on Tuesday, May
26, 1998, to consider proposals on the Bonds and take any other appropriate action with respect
to the Bonds.
The motion for the adoption of the foregoing resolution was duly seconded by
Councilmember
, and upon vote being taken thereon the following members voted
in favor of the motion:
and the following voted against:
whereupon the resolution was declared duly passed and adopted.
DJK141949
CH135-29
STATE OF MINNESOTA )
)
COUNTIES OF CARVER AND HENNEPIN )
)
CITY OF CHANHASSEN )
I, the undersigned, being the duly qualified and acting City Manager of the City of
Chanhassen, Minnesota, hereby certify that I have carefully compared the attached and foregoing
extract of minutes of a regular meeting of the City Council of the City held on Monday, April
27, 1998, with the original minutes on file in my office and the extract is a full, true and correct
copy of the minutes, insofar as they relate to the issuance and sale of $4,970,000 General
Obligation Park Bonds, Series 1998A of the City.
WITNESS My hand as City Manager and the corporate seal of the City this _ day
of
, 1998.
City Manager
City of Chanhassen, Minnesota
(SEAL)
DJK141949
CH135-29
Extract of Minutes of Meeting
of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota
Pursuant to due call and notice thereof a regular meeting of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, was held at the City Hall in the City
on Monday, April 27, 1998, commencing at _ o'clock _.M.
The following members of the Council were present:
and the following were absent:
* * *
* * *
* * *
The following resolution was presented by Councilmember
who moved
its adoption:
RESOLUTION NO.
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF
$1,325,000 GENERAL OBLIGATION IMPROVEMENT
BONDS, SERIES 1998B
BE IT RESOLVED By the City Council of the City ofChanhassen, Carver and Hennepin
Counties, Minnesota (City) as follows:
1. It is hereby determined that:
(a) the following assessable public improvements (the Improvements) have
been made, duly ordered or contracts let for the construction thereof, by the City pursuant
to the provisions of Minnesota Statutes, Chapter 429 (Act);
DJK141950
CH135-29
Proiect Designation & Description:
Total Proiect Cost
Project Costs
Costs of Issuance
Discount (1.0%)
Less: Investment Earnings
Total
$1,300,000
16,780
13,250
(5.030)
$1,325,000
(b) it is necessary and expedient to the sound financial management of the
affairs of the City to issue $1,325,000 General Obligation Improvement Bonds, Series
1998B (Bonds) pursuant to the Act to provide financing for the Improvements.
2. To provide financing for the Improvements, the City will issue and sell Bonds in
the amount of $1,311,750. To provide in part the additional interest required to market the
Bonds at this time, additional Bonds will be issued in the amount of $13,250. The excess of the
purchase price of the Bonds over the sum of $1,311,750 will be credited to the debt service fund
for the Bonds for the purpose of paying interest first coming due on the additional Bonds. The
Bonds will be issued, sold and delivered in accordance with the terms of the following Terms of
Proposal:
DJK141950
CH135-29
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS Will BE RECEIVED ON THE FOllOWING BASIS:
TERMS OF PROPOSAL
$1,325,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1998B
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 26, 1998, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul.
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted.
Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal
price and coupons, by telephone (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. All bidders are advised that each Proposal
shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
regardless of the manner of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1998, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
.'
2000 $170,000
2001 $180,000
2002 $175,000
2003 $170,000
2004 $165,000
2005 $160,000
2006 $155,000
2007 $150,000
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Obligation,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company ("OTC"),
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 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 purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
- i -
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City 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. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge special
assessments against benefited property. The proceeds will be used to finance improvements
within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $1,311,750 and accrued interest on the total principal
amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in
the form of a certified or cashier's check or a Financial Surety Bond in the amount of $13,250,
payable to the order of the City. If a check is used, it must accompany each proposal. 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 City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City 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 City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or
1/8 of 1%. Rates must be in ascending order. Bonds of the same maturity shall bear a single
rate from the date of the Bonds to the date of maturity. No conditional proposals will be
accepted.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and, (Hi) reject any proposal which the City determines to have failed to comply
with the terms herein.
- ii -
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
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 Obligation nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the purchaser.
SETTLEMENT
.
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven,
Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation
certificate. On the date of settlement payment for the Bonds shall be made in federal, or
equivalent, funds which shall be received at the offices of the City or its designee not later than
12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall
have been made impossible by action of the City, or its agents, the purchaser shall be liable to
the City for any loss suffered by the City by reason of the purchaser's non-compliance with said
terms for payment.
"
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
OFFICIAL STATEMENT
.
The City has authorized the preparation of an Official Statement containing pertinent
information relative to the Bonds, and said Official Statement will serve as a nearly-final Official
Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.
For copies of the Official Statement or for any additional information prior to sale, any
prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000.
.
.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
'.
- iii -
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 50 copies of the
Official Statement and the addendum or addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 27, 1998
BY ORDER OF THE CITY COUNCIL
Isl Donald W. Ashworth
City Manager
- iv-
3. Springsted Incorporated is authorized and directed to negotiate the Bonds in
accordance with the foregoing Terms of Proposal. The City Council will meet at 6:30 o'clock
P.M. on Tuesday, May 26, 1998, to consider proposals on the Bonds and take any other
appropriate action with respect to the Bonds.
The motion for the adoption of the foregoing resolution was duly seconded by
Councilmember
, and upon vote being taken thereon the following members voted
in favor of the motion:
and the following voted against:
whereupon the resolution was declared duly passed and adopted.
.
.
:4
"
..
DJK141950
CH135-29
STATE OF MINNESOTA
)
)
)
)
)
COUNTIES OF CARVER AND HENNEPIN
CITY OF CHANHASSEN
I, the undersigned, being the duly qualified and acting City Manager of the City of
Chanhassen, Minnesota, hereby certify that I have carefully compared the attached and foregoing
extract of minutes of a regular meeting of the City Council of the City held on Monday, April
27, 1998, with the original minutes on file in my office and the extract is a full, true and correct
copy of the minutes, insofar as they relate to the issuance and sale of $1,325,000 General
Obligation Improvement Bonds, Series 1998B of the City.
WITNESS My hand as City Manager and the corporate seal of the City this _ day
of
, 1998.
City Manager
City of Chanhassen, Minnesota
(SEAL)
DJK141950
rJ..f1 ~C;_?Q
Extract of Minutes of Meeting
of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota
Pursuant to due call and notice thereof a regular meeting of the City Council of the City
of Chanhassen, Carver and Hennepin Counties, Minnesota, was held at the City Hall in the City
on Monday, April 27, 1998, commencing at _ o'clock _oM.
The following members of the Council were present:
i4
and the following were absent:
..
***
***
***
..
The following resolution was presented by Councilmember
who moved
its adoption:
RESOLUTION NO.
..
..
RESOLUTION PROVIDING FOR THE ISSUANCE
AND SALE OF $820,000 GENERAL OBLIGATION
WATER REVENUE BONDS, SERIES 1998C
..
BE IT RESOLVED By the City Council of the City of Chanhassen, Carver and Hennepin
Counties, Minnesota (City) as follows:
1. It is determined that:
..
(a) the City engineer has recommended the construction of varIOUS
improvements to the City's water utility (Project).
..
..
(b) the City is authorized by Minnesota Statutes, Section 444.075 (Act) to
finance all or a portion of the cost of the Project (Project Costs) by the issuance of
general obligation bonds of the City payable from the net revenues of the water system.
The Project Costs are presently estimated by the engineer to be as follows:
DJK141953
rH'~'i-2q
Proiect Designation & Description
Total Proiect Cost
Total Project Costs
Costs of Issuance
Allowance for Discount
Less: Investment Earnings
Total Bond Issue
$800,000
14,040
10,250
(4.290)
$820,000
(c) it is necessary and expedient to the sound financial management of the
affairs of the City to issue $820,000 General Obligation Water Revenue Bonds, Series
1998C (Bonds) pursuant to the Act to provide financing for the Project.
2. In order to provide financing for the Project, the City will therefore issue and sell
Bonds in the amount of $809,750. To provide in part the additional interest required to market
the Bonds at this time, additional Bonds will be issued in the amount of $10,250. The excess
of the purchase price of the Bonds over the sum of $809,750 will be credited to the debt service
fund for the Bonds for the purpose of paying interest first coming due on the additional Bonds.
The Bonds will be issued, sold and delivered in accordance with the terms of the following Terms
of Proposal:
DJK141953
- :-
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WilL BE RECEIVED ON THE FOllOWING BASIS:
TERMS OF PROPOSAL
$820,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 1998C
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 26, 1998, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted.
Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal
price and coupons, by telephone (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. All bidders are advised that each Proposal
shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
regardless of the manner of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1998, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
2000 $35,000
2001 $55,000
2002 $75,000
2003
2004
2005
$85,000
$85,000
$90,000
2006
2007
$90,000
$95,000
2008
2009
$105,000
$105,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds, provided that no serial bond may mature on or after the first mandatory
sinking fund redemption date of any term bond. All term bonds shall be subject to mandatory
sinking fund redemption and must conform to the maturity schedule set forth above at a price of
par plus accrued interest to the date of redemption. In order to designate term bonds, the
proposal must specify "Last Year of Serial Maturities" and "Years of Term Maturities" in the
spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Obligation,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"),
- I -
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 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 purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2006, and on any day thereafter, to prepay Bonds due on or
after February 1, 2007. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City 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. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge net
revenues of the City's water utility. The proceeds will be used to finance construction of
improvements to the City's water utility.
TYPE OF PROPOSALS
Proposals shall be for not less than $809,750 and accrued interest on the total principal amount
of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in the form
of a certified or cashier's check or a Financial Surety Bond in the amount of $8,200, payable to
the order of the City. If a check is used, it must accompany each proposal. 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 City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City 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 City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or
1/8 of 1 %. Rates must be in ascending order. Bonds of the same maturity shall bear a single
rate from the date of the Bonds to the date of maturity. No conditional proposals will be
accepted.
- ii -
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and, (iii) reject any proposal which the City determines to have failed to comply
with the terms herein.
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 Obligation nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven,
Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation
certificate. On the date of settlement payment for the Bonds shall be made in federal, or
equivalent, funds which shall be received at the offices of the City or its designee not later than
12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall
have been made impossible by action of the City, or its agents, the purchaser shall be liable to
the City for any loss suffered by the City by reason of the purchaser's non-compliance with said
terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent
information relative to the Bonds, and said Official Statement will serve as a nearly-final Official
Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.
For copies of the Official Statement or for any additional information prior to sale, any
prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 50 copies of the
- iii -
Official Statement and the addendum or addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 27 I 1998
BY ORDER OF THE CITY COUNCIL
Isl Donald W. Ashworth
City Manager
- iv-
3. Springsted Incorporated is authorized and directed to negotiate the Bonds in
accordance with the foregoing Terms of Proposal. The City Council will meet at 6:30 o'clock
P.M. on Tuesday, May 26, 1998, to consider proposals on the Bonds and take other appropriate
action with respect to the Bonds.
4. In the resolution awarding the sale of the Bonds the City Council will set forth the
covenants and undertakings required by the Act.
The motion for the adoption of the foregoing resolution was duly seconded by
Councilmember
, and upon vote being taken thereon the following members voted
in favor of the motion:
and the following voted against:
whereupon the resolution was declared duly passed and adopted.
DJK141953
CH135-29
STATE OF MINNESOTA )
)
COUNTIES OF CARVER AND HENNEPIN )
)
CITY OF CHANHASSEN )
I, the undersigned, being the duly qualified and acting City Manager of the City of
Chanhassen, Minnesota, hereby certify that I have carefully compared the attached and foregoing
extract of minutes of a regular meeting of the City Council of the City held on Monday, April
27, 1998, with the original minutes on file in my office and the extract is a full, true and correct
copy of the minutes, insofar as they relate to the issuance and sale of $820,000 General
Obligation Water Revenue Bonds, Series 1998C of the City.
WITNESS My hand as City Manager and the corporate seal of the City this _ day
of
, 1998.
City Manager
City of Chanhassen, Minnesota
(SEAL)
DJK141953
CH135-29
Recommendations
For
City of Chanhassen, Minnesota
$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
Presented to:
Mayor Nancy Mancino
Members, City Council
Mr. Donald W. Ashworth, City Manager
Ms. Pam Snell, Finance Director
City of Chanhassen
P.O. Box 147
690 Coulter Drive
Chanhassen, MN 55317-0147
SPRINGS TED
Public Finana Advisors
Study No.: C023612J2K2
SPRINGSTED Incorporated
April 22, 1998
~
RECOMMENDA TIONS
Re: Recommendations for the Issuance of:
$4,970,000 General Obligation Park Bonds, Series 1998A (the "Series 1998A Bonds")
$1,325,000 General Obligation Improvement Bonds, Series 1998B (the "Series 1998B
Bonds")
$820,000 General Obligation Water Revenue Bonds, Series 1998C (the "Series 1998C
Bonds")
Proceeds of the Series 1998A Bonds are being issued pursuant to the City's park referendum
held June 14, 1997. City voters authorized the financing of $4,900,000 for the acquisition and
betterment of park, trail and open space recreational facilities by a vote of 1,142 (yes) to 707
(no).
Proceeds of the Series 1998B Bonds will be used to finance street and utility improvements for
Phase I of Gateway West.
Proceeds of the Series 1998C Bonds will be used to finance two water utility projects, the
construction of Well #8 and construction of a new water storage tank.
The City is proceeding with the sale of the three above-mentioned issues on May 26, 1998. In
addition to these three issues, we recommend the City sell three additional series of general
obligation tax increment bonds within 30 days of the May 26, 1998 sale date. We do not
believe it is in the City's best interest to competitively sell all six issues in a single day. We feel
the City will benefit from more competitive bidding if the six issues are sold on two separate
days. By leaving up to a month between the two sale dates, the purchasers of the first three
series of bonds should have sufficient time to place all of the first three series of bonds with
investors prior to the sale of the second series of bonds. The City does incur an element of
market risk due to this separation. To mitigate this, we will attempt to sell the second series as
soon as possible.
We recommend the following for the Bonds:
1. Action Requested To establish the date and time of receiving
bids and establish the terms and conditions
of the offering.
2. Sale Date and Time Tuesday, May 27, 1998 at 10:30 A.M., with
award by the City Council at 6:30 P.M. the
same day.
3. Authority and Purpose for the Bond Issue All series of Bonds are being issued
pursuant to Minnesota Statutes, Chapter
475. In addition: the Series 1998A Bonds
are being issued pursuant to a voter
referendum held June 14, 1997; the Series
1998B Bonds are being issued pursuant to
Minnesota Statutes, Chapter 429; and the
Series 1998C Bonds are being issued
City of Chanhassen, Minnesota
April 22, 1998
pursuant to Minnesota Statutes,
Chapter 444.
Proceeds of the Series 1998A Bonds will
finance the acquisition and betterment of
park, trail and open space recreational
facilities. Proceeds of the Series 1998B and
Series 1998C will finance street/utility and
water utility projects, respectively.
4. Principal Amount of Offering
The Series 1998A Bonds - $4,970,000
The Series 1998B Bonds - $1,325,000
The Series 1998C Bonds - $820,000
5. Repayment Term
The first interest payment on all series of
Bonds is due February 1, 1999.
Principal repayment for the Series 1998A
Bonds will be February 1, 2002 through
2010.
Principal repayment on the Series 1998B
Bonds will be February 1, 2000 through
2007.
Principal repayment of the Series 1998C
Bonds will be February 1, 2000 through
2009.
6. Source of Payments
The Series 1998A Bonds will be paid from
general ad valorem tax levies. The City
made its first levy for this Issue in 1997 for
collection in 1998.
The Series 1998B Bonds are expected to be
paid 100% from special assessments filed
against benefited property. Special
assessments are expected to be filed on or
before October 1, 1998 for first collection in
1999. The February 1, 1999 interest
payment will be made from a temporary
transfer of available funds until the receipt of
first-half assessment collections in 1999.
The Series 1998C Bonds will be paid from
net revenues of the City's water utility and
tax increment revenues from the City's Tax
Increment District No. 6-1.
Page 2
City of Chanhassen, Minnesota
April 22, 1998
7. Prepayment Provisions
8. Credit Rating Comments
9. Federal Treasury Regulations Concerning
Tax-Exempt Obligations
(a) Bank Qualification
(b) Rebate Requirements
The City may elect on February 1, 2006, and
on any day thereafter, to prepay the Series
1998A and the Series 1998C Bonds due on
or after February 1, 2007. The City may
elect on February 1, 2005, and on any day
thereafter, to prepay the Series 1998B
Bonds due on or after February 1, 2006. All
prepayments will be at a price of par plus
accrued interest.
We recommend the City apply to Standard &
Poor's Ratings Services for ratings on these
Issues. The City is currently rated "A-" by
Standard & Poor's.
Under Federal Tax Law, financial institutions
cannot deduct from income for federal
income tax purposes, income expense that
is allocable to carrying and acquiring tax-
exempt bonds. There is an exemption to
this for "bank qualified" bonds, which can be
so designated if the issuer does not issue
more than $10 million of tax exempt bonds
in a calendar year. Issues that are bank
qualified receive slightly lower interest rates
than issues that are not bank qualified.
Since the City will issue over $10 million in
tax-exempt bonds in 1998, these Issues will
not be designated as bank qualified.
All tax-exempt issues are subject to the
federal arbitrage and rebate requirements,
which require all excess earnings created by
the financing to be rebated to the U.S.
Treasury. The requirements generally cover
two categories: bond proceeds and debt
service funds. There are exemptions from
rebate in both of these categories.
Bond proceeds, defined generally as both
the original principal of the issue and the
investment earnings on the principal, have
6, 18 and 24 month spend down exemption
periods. If all of the proceeds are expended
during one of those exemption periods, the
issuer is exempt from rebate and may retain
the excess earnings. The City should be
aware that this test is an "actual" test, not
one of "reasonable expectations" and the
Page 3
City of Chanhassen, Minnesota
April 22, 1998
(c) Bona Fide Debt Service Fund
(d) Economic Life
10. Federal Reimbursement Regulations
11. Continuing Disclosure
more complete discussion of rebate is
contained in the Arbitrage and Rebate
Primer transmitted to your finance staff
under separate cover.
The City must maintain a bona fide debt
service fund for the Bonds or be subject to
yield restriction. This requires restricting the
investments held in the debt service funds to
the yield on the Bonds and/or paying back
excess investment earnings in the debt
service fund to the federal government. A
bona fide debt service fund is a fund for
which there is an equal matching of revenue
to debt service expense, with carry over
permitted equal to the greater of the
investment earnings in the fund during that
year or 1/12 the debt service of that year.
The average life of the Bonds cannot
exceed 120% of the economic life of the
projects to be financed. The economic life
of the various projects is 20 to 40 years.
Therefore, the Issues are within the
economic life requirements.
Federal reimbursement regulations require
the City to make a declaration, within
60 days of the actual payment, of its intent
to reimburse itself from expenses paid prior
to the receipt of bond proceeds. The City
should consult with its Bond Council to
determine if it has taken the necessary steps
to comply with the federal reimbursement
regulations in regards to the Bonds.
These Issues are subject to the continuing
disclosure requirements. The SEC rules
require the City to undertake an annual
update of its Official Statement information
and report any material events to the
national repositories. Springsted currently
provides continuing disclosure services to
the City. We have provided City staff with
contract amendments to include these
Issues.
Page 4
City of Chanhassen, Minnesota
April 22, 1998
12. Attachments
· The Series 1998A Bonds - Debt Service
Schedule
· The Series 1998B Bonds - Assessment
Income Schedule and Debt Service
Schedule
· The Series 1998C Bonds - Debt Service
Schedule
. Terms of Proposal
DISCUSSION
The Series 1998A Bonds
The Series 1998A Bonds represent the entire authorization to be sold under the City's
$4,900,000 voter approved referendum for park, open space and trail acquisition. Minnesota
Statutes permit the City to issue up to 2% over the voted authorization for purposes of discount
bidding. The discount represents the underwriter's profit for buying the bond issue and
remarketing the bonds in smaller pieces to investors. The City staff informs us of the need of
all of the voted authorization for project costs. Therefore, we have added $70,000, or
approximately $14 per $1,000 bond, to the voted authorization for discount bidding purposes.
The cash flow schedule for the Series 1998A Bonds is shown on page 7. Columns 3 through 7
show the projected debt service schedule for the Series 1998A Bonds. The repayment of the
Series 1998A Bonds has been structured around the City's existing tax supported debt service
levy in column 8 and a projected 5% annual increase in the City's market value as shown in
column 10. The result is an even tax rate increase over the life of the Series 1998A Bonds as
shown in column 12. The City made a levy in 1997 in the amount of $375,000 for this Issue in
anticipation the Series 1998A Bonds would be sold in 1997. Because the Series 1998A Bonds
are being issued later than anticipated, the interest payment due February 1, 1999 is less than
half of the $375,000 originally projected. That portion of the 1997 debt service levy for the
Series 1998A Bonds not required to make the February 1, 1999 interest payment will be used
to reduce the levy requirement in 1998.
A copy of the Official Ballot for the park referendum is shown on page 8. Pursuant to the
Official Ballot, the 1997 debt service levy on the Series 1998A Bonds does not exceed
$372,295 and the maximum projected debt service levy on the Series 1998A Bonds is
estimated to be less than $1,094,213. Furthermore, the maximum property tax levy increase
due to the Series 1998A Bonds is estimated to be less than .02% of the taxable market value of
the City, assuming a 5% annual increase in the City's market value.
The Series 1998B Bonds
The proceeds of the Series 1998B Bonds will be used to finance the Phase I Gateway West
street and utility improvements which will be 100% assessed against benefited property,
including costs of issuance and the allowance for discount bidding. The composition of the
Series 1998B Bonds is as follows:
Project Costs
Costs of Issuance
Allowance for Discount Bidding
Less: Investment Earnings
Total Series 1998A Bonds
$1,300,000
6,780
3,250
(5.030)
$1,325,000
Page 5
City of Chanhassen, Minnesota
April 22, 1998
Page 9 shows the projection of special assessment income. Special assessments totaling
$1,325,000 of principal are expected to be filed on or before October 1, 1998 for first collection
in 1999. Assessments will be filed over a term of eight years with even annual principal
payments, and interest charged on the unpaid balance at a rate of 8.0%.
The principal repayment of the Series 1998B Bonds is shown on page 10 and has been
structured to blend with the projected assessment income shown on page 9. The first interest
payment (February 1, 1999) is due prior to the receipt of special assessments. Therefore, the
City will make a temporary transfer of other available funds to make the February 1, 1999
interest payment. Thereafter, each August 1 interest payment will be made from first-half
collections of special assessments and each subsequent February 1 principal and interest
payment will be made from second-half collections, plus surplus first-half collections.
The Series 1998C Bonds
Proceeds of the Series 1998C Bonds will be used to finance construction of Well #8 and a new
water storage tank. Although net revenues of the City's water utility will be pledged to the
repayment of the Series 1998C Bonds, the City expects to repay the water storage tank portion
of this Issue primarily with tax increment revenues from the City's Tax Increment District
No. 6-1. Therefore, the repayment of the two projects has been structured independently as
shown on page 11 of these recommendations. The composition of the total Issue is shown on
the bottom of page 11.
Columns 3 through 6 on page 11 show that portion of the Series 1998C Bonds that will be used
to finance the construction of Well #8. This portion of the Series 1998C Bonds will be paid
entirely from net revenues of the City's water utility beginning with the first interest payment due
February 1, 1999. Column 6 through 8 show that portion of the Series 1998C Bonds that will be
used to finance construction of the new water storage tank. Interest payments due through
February 1, 2001 on this portion of the Issue will be paid from the City's Sewer and Water
Expansion Fund. Thereafter, the City expects to make each August 1 interest payment from
first-half collections of tax increment revenues from the City's Tax Increment District No. 6-1
and each subsequent February 1 principal and interest payment from second-half collections,
plus surplus first-half collections. The combined Issue is shown in columns 9 through 12.
Respectfully submitted,
3?Z"7'~ p~tiJ
SPRIN&E~ I~~~rporated
jen
Provided to Staff:
a) Summary of Arbitrage Rules
b) Rebate Contract
c) Continuing Disclosure Contract Amendment
Page 6
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OFFICIAL BALLOT
SPECIAL ELECTION
CITY OF CHANHASSEN
Saturday, June 14, 1997
The City of Chanhassen is askini voter approval to issue and sell its general obligation
bonds in an amount not to exceed S4,900,000 to tinance park, open space and trail acquisition.
The amount of taxes that would be raised in the first year of the propcny tax levy to pay
the principal and interest on the bonds is estimated to be approximately $372,295. The maximum
amOunt of taxes that would be raised in any subsequent year for the purpose is estimated to be
approximately SI,094,213. This maximum increase in property tax levy is estimated to be
approximately .02% of the taxable market value of propeny in the City.
SHOULD THE CITY OF CHANHASSEN BE AUTHORIZED TO
ISSUE AND SELL ITS GENERAL OBLIGATION BONDS IN
AN AMOUNT NOT TO EXCEED $4,900,000 TO FINANCE THE
ACQUISITION AND BETTERMENT OF PARK. TRAIL, AND
OPEN SP ACE RECREATIONAL FACILITIES?
BY VOTING "YES" ON THIS BALLOT QUESTION. YOU ARE VOTING FOR A
PROPERTY TAX INCREASE.
YES
(
(
)
)
NO
INSTRUCTIONS TO VOTERS: Voters desiring to vote in favor of the foregoing proposition
shall make a cross mark (X) in the square opposite the word YES. Voters desiring to vote
against the foregoing proposition shall place a cross mark (X) opposite the word NO.
Page 8
CITY OF CHANHASSEN, MINNESOTA
G.O. Improvement Bonds, Series 1998B
Prepared April 13, 1998
By SPRINGSTED Incorporated
PROJECTED ASSESSMENT INCOME
Gateway West (Phase I)
Filing Date: 10/ 1/1998
Filing Collect Interest
Year Year Principal @ 8.000% Total
--.....--- --------- --------
1998 1999 165,625 132,718a 298,343
1999 2000 165,625 92,750 258,375
2000 2001 165,625 79,500 245, 125
2001 2002 165,625 66,250 231,875
2002 2003 165,625 53,000 218,625
2003 2004 165,625 39,750 205,375
2004 2005 165,625 26,500 192, 125
2005 2006 165,625 13,250 178,875
TOTALS 1,325,000 503,718 1,828,718
a) Includes interest from filing
date to 12/31/1999.
Page 9
CITY OF CHANHASSEN, MINNESOTA Prepared April 13, 1998
G.O. Improvement Bonds, Series 1998B By SPRINGSTED Incorporated
Dated: 6- 1-1998
Mature: 2- 1
First Interest: 2- 1-1999
Total Projected
Year of Year of Principal 105% Assessment Annual
Levy Mat. Principal Rates Interest & Interest of Total Income Surplus
( 1 ) (2) (3 ) (4) (5) (6 ) (7) (8) (9)
1998 2000 170,000 4.20% 98,755 268,755 282, 193 298,343 16, 150
1999 2001 180,000 4.30% 52, 113 232,113 243,719 258,375 14,656
2000 2002 175,000 4.35% 44,373 219,373 230,342 245, 125 14,783
2001 2003 170,000 4.45% 36,760 206,760 217,098 231,875 14,777
2002 2004 165,000 4.50% 29, 195 1 94 , 1 95 203,905 218,625 14,720
2003 2005 160,000 4.60% 21,770 181,770 190,859 205,375 14,516
2004 2006 155,000 4.70% 14,410 169,410 177,881 1 92 , 125 14,244
2005 2007 150,000 4.75% 7,125 1 57 , 125 164,981 178,875 13,894
roT ALS : 1,325,000 304,501 1,629,501 1,710,978 1,828,718
Jond Years:
~vg . Maturity:
wg. Annual Rate:
. . I. C. Rate:
6,688.33
5.05
4.553%
4.772%
Annual Interest:
Plus Discount:
Net Interest:
N. I. C. Rate:
304,501
13,250
317,751
4.751%
:nterest rates are estimates; changes may cause significant alterations of this schedule.
"he actual underwriter's discount bid may also vary.
Page 10
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THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$4,970,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION PARK BONDS, SERIES 1998A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 26, 1998, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted.
Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal
price and coupons, by telephone (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. All bidders are advised that each Proposal
shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
regardless of the manner of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1998, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
2002
2003
2004
$225,000
$255,000
$315,000
2005
2006
2007
$615,000
$680,000
$755,000
2008
2009
2010
$835,000
$920,000
$370,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds, provided that no serial bond may mature on or after the first mandatory
sinking fund redemption date of any term bond. All term bonds shall be subject to mandatory
sinking fund redemption and must conform to the maturity schedule set forth above at a price of
par plus accrued interest to the date of redemption. In order to designate term bonds, the
proposal must specify "Last Year of Serial Maturities" and "Years of Term Maturities" in the
spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Obligation,
representing the aggregate principal amount of the Bonds maturing in each year, will be
Page 12
registered in the name of Cede & Co. as nominee of The 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 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 purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2006, and on any day thereafter, to prepay Bonds due on or
after February 1, 2007. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City 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. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. The proceeds will be used to finance
the acquisition and betterment of City park, trail, and open space recreational facilities.
TYPE OF PROPOSALS
Proposals shall be for not less than $4,900,000 and accrued interest on the total principal
amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in
the form of a certified or cashier's check or a Financial Surety Bond in the amount of $49,700,
payable to the order of the City. If a check is used, it must accompany each proposal. 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 City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City 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 City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or
1/8 of 1 %. Rates must be in ascending order. Bonds of the same maturity shall bear a single
rate from the date of the Bonds to the date of maturity. No conditional proposals will be
accepted.
Page 13
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and, (iii) reject any proposal which the City determines to have failed to comply
with the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
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 Obligation nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven,
Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation
certificate. On the date of settlement payment for the Bonds shall be made in federal, or
equivalent, funds which shall be received at the offices of the City or its designee not later than
12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall
have been made impossible by action of the City, or its agents, the purchaser shall be liable to
the City for any loss suffered by the City by reason of the purchaser's non-compliance with said
terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
Page 14
OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent
information relative to the Bonds, and said Official Statement will serve as a nearly-final Official
Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.
For copies of the Official Statement or for any additional information prior to sale, any
prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 200 copies of
the Official Statement and the addendum or addenda described above. The City designates
the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent
for purposes of distributing copies of the Final Official Statement to each Participating
Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby
that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall
enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes
of assuring the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 27, 1998
BY ORDER OF THE CITY COUNCIL
Isl Donald W. Ashworth
City Manager
Page 15
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$1,325,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1998B
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 26, 1998, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted.
Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal
price and coupons, by telephone (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. All bidders are advised that each Proposal
shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
regardless of the manner of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1998, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
2000 $170,000
2001 $180,000
2002 $175,000
2003 $170,000
2004 $165,000
2005 $160,000
2006 $155,000
2007 $150,000
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Obligation,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The 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 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 purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
Page 16
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2005, and on any day thereafter, to prepay Bonds due on or
after February 1, 2006. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City 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. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge special
assessments against benefited property. The proceeds will be used to finance improvements
within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $1,311,750 and accrued interest on the total principal
amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in
the form of a certified or cashier's check or a Financial Surety Bond in the amount of $13,250,
payable to the order of the City. If a check is used, it must accompany each proposal. 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 City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City 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 City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or
1/8 of 1%. Rates must be in ascending order. Bonds of the same maturity shall bear a single
rate from the date of the Bonds to the date of maturity. No conditional proposals will be
accepted.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and, (iii) reject any proposal which the City determines to have failed to comply
with the terms herein.
Page 17
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
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 Obligation nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven,
Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation
certificate. On the date of settlement payment for the Bonds shall be made in federal, or
equivalent, funds which shall be received at the offices of the City or its designee not later than
12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall
have been made impossible by action of the City, or its agents, the purchaser shall be liable to
the City for any loss suffered by the City by reason of the purchaser's non-compliance with said
terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent
information relative to the Bonds, and said Official Statement will serve as a nearly-final Official
Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.
For copies of the Official Statement or for any additional information prior to sale, any
prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
Page 18
underwriter or underwriting syndicate .submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 50 copies of the
Official Statement and the addendum or addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 27, 1998
BY ORDER OF THE CITY COUNCIL
Isl Donald W. Ashworth
City Manager
Page 19
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS
ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$820,000
CITY OF CHANHASSEN, MINNESOTA
GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 1998C
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, May 26, 1998, until 10:30 A.M., Central
Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul,
Minnesota, after which time they will be opened and tabulated. Consideration for award of the
Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Proposals may be submitted in a sealed envelope or by fax (612) 223-3002 to Springsted.
Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the
time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal
price and coupons, by telephone (612) 223-3000 or fax (612) 223-3002 for inclusion in the
submitted Proposal. Springsted will assume no liability for the inability of the bidder to reach
Springsted prior to the time of sale specified above. All bidders are advised that each Proposal
shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds
regardless of the manner of the Proposal submitted.
DETAILS OF THE BONDS
The Bonds will be dated June 1, 1998, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts as follows:
2000
2001
2002
$35,000
$55,000
$75,000
2003
2004
2005
$85,000
$85,000
$90,000
2006
2007
$90,000
$95,000
2008
2009
$105,000
$105,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds, provided that no serial bond may mature on or after the first mandatory
sinking fund redemption date of any term bond. All term bonds shall be subject to mandatory
sinking fund redemption and must conform to the maturity schedule set forth above at a price of
par plus accrued interest to the date of redemption. In order to designate term bonds, the
proposal must specify "Last Year of Serial Maturities" and "Years of Term Maturities" in the
spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Obligation,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"),
Page 20
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 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 purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2006, and on any day thereafter, to prepay Bonds due on or
after February 1, 2007. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City 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. All prepayments shall be at a price of par plus accrued interest.
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition the City will pledge net
revenues of the City's water utility. The proceeds will be used to finance construction of
improvements to the City's water utility.
TYPE OF PROPOSALS
Proposals shall be for not less than $809,750 and accrued interest on the total principal amount
of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in the form
of a certified or cashier's check or a Financial Surety Bond in the amount of $8,200, payable to
the order of the City. If a check is used, it must accompany each proposal. 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 City. Such bond must be submitted to
Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must
identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is
required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time, on the next business day following the award. If such Deposit is not received by that
time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The City 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 City. No proposal can
be withdrawn or amended after the time set for receiving proposals unless the meeting of the
City scheduled for award of the Bonds is adjourned, recessed, or continued to another date
without award of the Bonds having been made. Rates.shall be in integral multiples of 5/100 or
1/8 of 1 %. Rates must be in ascending order. Bonds of the same maturity shall bear a single
rate from the date of the Bonds to the date of maturity. No conditional proposals will be
accepted.
Page 21
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and, (iii) reject any proposal which the City determines to have failed to comply
with the terms herein.
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 Obligation nor any error with
respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of
the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification
numbers shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be
subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven,
Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation
certificate. On the date of settlement payment for the Bonds shall be made in federal, or
equivalent, funds which shall be received at the offices of the City or its designee not later than
12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall
have been made impossible by action of the City, or its agents, the purchaser shall be liable to
the City for any loss suffered by the City by reason of the purchaser's non-compliance with said
terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
description of this undertaking is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
OFFICIAL STATEMENT
The City has authorized the preparation of an Official Statement containing pertinent
information relative to the Bonds, and said Official Statement will serve as a nearly-final Official
Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.
For copies of the Official Statement or for any additional information prior to sale, any
prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated,
85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official Statement" of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 50 copies of the
Page 22
Official Statement and the addendum E:lr addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 27, 1998
BY ORDER OF THE CITY COUNCIL
/s/ Donald W. Ashworth
City Manager
Page 23