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HomeMy WebLinkAbout20180521 - VI-07 Bond Sale Series 2018A City Council Memorandum To: Mayor Hicks & City Councilmembers From: Melanie Lammers, Finance Manager Date: May 21, 2018 Item: Set Sale Date for Issuance of Bonds Council Action Requested: Approve the sale date as June 18, 2018 for $3,460,000 of General Obligation Bonds, as well as corresponding resolution. Background Information: These bonds are for the financing of various street improvement projects within the City, as well as improvements along the Riverfront. These obligations will be sold by a competitive negotiated sale in accordance with Minnesota Statues, Section 475.60, Subdivision 2 (9). The rating of these bonds will take place the week of June 4th, 2018 Financial Impact: Bonds and interest payments are factored into the City’s debt structure. Advisory Commission Discussion: N/A Council Committee Discussion: N/A Attachments: Resolution VI-07 EXTRACTOFMINUTESOFAMEETINGOFTHE CITYCOUNCILOFTHE CITYOFHASTINGS, MINNESOTA HELD: May21, 2018 Pursuanttoduecallandnoticethereof, aregularmeetingoftheCityCouncil of theCityofHastings, DakotaandWashingtonCounties, Minnesota, wasdulyheldattheCity HallinsaidCityonthe21stdayofMay, 2018at7:00o'clockP.M. forthepurposeinpartof authorizingthecompetitivenegotiatedsaleofthe $3,460,000GeneralObligationBonds, Series 2018AofsaidCity. Thefollowingmemberswerepresent: andthefollowingwereabsent: Member ________________ introducedthefollowingresolutionandmovedits adoption: RESOLUTIONPROVIDINGFORTHECOMPETITIVENEGOTIATED SALEOF $3,460,000 GENERALOBLIGATIONBONDS, SERIES2018A A.WHEREAS, theCityCounciloftheCityofHastings, Minnesota, has heretoforedeterminedthatitisnecessaryandexpedienttoissueits $3,460,000General ObligationBonds, Series2018A (the "Bonds") tofinance (i) variousstreetimprovement projects; (ii) variousutilityimprovements; and (iii) improvementsrelatedtotheCity'sRiverfront RenaissanceProject; and B.WHEREAS, theCityhasretainedSpringstedIncorporated, inSaintPaul, Minnesota ("Springsted"), asitsindependentmunicipaladvisorinconnectionwiththeissuance oftheBondsandisthereforeauthorizedtoselltheseobligationsbyacompetitivenegotiatedsale inaccordancewithMinnesotaStatutes, Section475.60, Subdivision2(9); and NOW, THEREFORE, BEITRESOLVEDbytheCityCounciloftheCityof Hastings, Minnesota, asfollows: 1.Authorization; Findings. TheCityCouncilherebyauthorizesSpringstedtosolicit bidsforthecompetitivenegotiatedsaleoftheBonds. 2.Meeting; BidOpening. ThisCityCouncilshallmeetatthetimeandplace specifiedintheTermsofProposalattachedheretoasExhibitAforthepurposeofconsidering sealedbidsfor, andawardingthesaleof, theBonds. TheClerk, ordesignee, shallopenbidsat thetimeandplacespecifiedinsuchTermsofProposal. 3.TermsofProposal. ThetermsandconditionsoftheBondsandthenegotiation thereofarefullysetforthinthe "TermsofProposal" attachedheretoasExhibitAandhereby approvedandmadeaparthereof. 10775915v1 VI-07 4.OfficialStatement. Inconnectionwithsaidcompetitivenegotiatedsale, theClerk andotherofficersoremployeesoftheCityareherebyauthorizedtocooperatewithSpringsted andparticipateinthepreparationofanofficialstatementfortheBonds, andtoexecuteand deliveritonbehalfoftheCityuponitscompletion. Themotionfortheadoptionoftheforegoingresolutionwasdulysecondedby member _______________ and, afterfulldiscussionthereofanduponavotebeingtaken thereon, thefollowingvotedinfavorthereof: andthefollowingvotedagainstthesame: Whereuponsaidresolutionwasdeclareddulypassedandadopted. 2 10775915v1 VI-07 STATEOFMINNESOTA COUNTIESOFDAKOTAANDWASHINGTON CITYOFHASTINGS I, theundersigned, beingthedulyqualifiedandactingClerkoftheCityof Hastings, Minnesota, DOHEREBYCERTIFYthatIhavecomparedtheattachedandforegoing extractofminuteswiththeoriginalthereofonfileinmyoffice, andthatthesameisafull, true andcompletetranscriptoftheminutesofameetingoftheCityCouncilofsaidCity, dulycalled andheldonthedatethereinindicated, insofarassuchminutesrelatetoprovidingforthesaleof theCity's $3,460,000GeneralObligationBonds, Series2018A. WITNESSmyhandthis _____ dayofMay, 2018. Clerk 3 10775915v1 VI-07 THECITYHASAUTHORIZEDSPRINGSTEDINCORPORATEDTONEGOTIATE THIS ISSUEONITSBEHALF. PROPOSALSWILLBERECEIVEDONTHEFOLLOWINGBASIS: TERMSOFPROPOSAL 3,460,000* CITYOFHASTINGS, MINNESOTA GENERALOBLIGATIONBONDS, SERIES2018A BOOKENTRYONLY) Proposalsfortheabove-referencedobligations (the “Bonds”) willbereceivedbytheCityofHastings, Minnesota (the “City”) onMonday, June18, 2018, (the “SaleDate”) until11:00A.M., CentralTimeat theofficesofSpringstedIncorporated (“Springsted”), 380JacksonStreet, Suite300, SaintPaul, Minnesota, 55101, afterwhichtimeproposalswillbeopenedandtabulated. Considerationforawardof theBondswillbebytheCityCouncilatitsmeetingcommencingat7:00P.M., CentralTime, ofthesame day. SUBMISSIONOFPROPOSALS SpringstedwillassumenoliabilityfortheinabilityofabiddertoreachSpringstedpriortothetimeofsale specifiedabove. Allbiddersareadvisedthateachproposalshallbedeemedtoconstituteacontract betweenthebidderandtheCitytopurchasetheBondsregardlessofthemannerinwhichtheproposalis submitted. a) [[ 388,1626,696,1678][11][B,I,][Times NewRoman]]SealedBidding. [[696,1626,734,1679][ 11][,,][TimesNew Roman]] [[734,1626,2006,1679][11][,,][TimesNewRoman]]Proposalsmaybesubmittedin a sealedenvelope or byfax (651) [[2006,1626,2018,1679][11][,,][TimesNewRoman]] [[2018,1626, 2087, 1679][11][,,][TimesNewRoman]]223 [[2087,1626,2102,1679][11][,,][TimesNew Roman]]- [[2102,1626, 2263,1679][11][,,][TimesNewRoman]]3046toSpringsted. Signed proposals, without finalprice orcoupons, maybesubmittedtoSpringstedpriortothetimeofsale. ThebiddershallberesponsibleforsubmittingtoSpringstedthefinalproposalpriceand coupons, bytelephone (651) 223-3000 orfax (651) 223-3046forinclusioninthesubmittedproposal. 300,1826,323,1878][ 11][B,I,][TimesNewRoman]] 300,1876,364,1928][11][B,I,][TimesNewRoman]]OR [[364,1876,387, 1928][11][B,I,][TimesNewRoman]] b) [[380,1976,754,2028][11][B,I,][TimesNewRoman]] ElectronicBidding. [[754,1976,768,2029][11][,,][TimesNewRoman]] [[767,1976,2215,2029][11][,,][Times NewRoman]]Notice isherebygiventhatelectronicproposalswillbereceivedviaPARITY [[2237,1976,2274,2029][11][,,][ TimesNewRoman]]. For purposesoftheelectronic biddingprocess, thetime asmaintained byPARITY shallconstitutetheofficialtime with respectto allproposalssubmitted toPARITY. [[1525,2076,2261, 2129][ VI-07 DETAILSOFTHEBONDS TheBondswillbedatedasofthedateofdeliveryandwillbearinterestpayableonFebruary1and August1ofeachyear, commencingFebruary1, 2019. Interestwillbecomputedonthebasisofa360- dayyearoftwelve30-daymonths. TheBondswillmatureintheyearsandamounts* asfollows: 2020 $320,000 2022 $325,000 2024 $340,000 2026 $360,000 2028 $370,000 2021 $325,000 2023 $335,000 2025 $350,000 2027 $360,000 2029 $375,000 300,731,322,779][10][,I,][TimesNewRoman]] 300,773,321,821][10][,I,][TimesNew Roman]]* 321,777,375,825][10][,I,][TimesNewRoman]] [[375,777,2260,825][10][,I,][TimesNewRoman]] TheCityreservestheright, afterproposalsareopenedandpriortoaward, toincreaseorreduce theprincipal375,818,1596,866][10][,I,][TimesNew Roman]]amountofthe Bondsorthe amountofanymaturityor maturitiesin [[1596, 818,2260,866][10][,I,][TimesNewRoman]]multiplesof $5,000.Intheeventthe375,860,2260, 908][10][,I,][TimesNewRoman]]amountofanymaturityismodified, theaggregatepurchase pricewillbe adjustedtoresultinthesamegross375,902,2195,950][10][,I,][TimesNewRoman]]spread per $1, 000ofBondsasthatof the originalproposal. Grossspread forthispurposeisthe differen [[2195,902,2260,950][10][,I,][TimesNewRoman]]tial375,943,2260,991][10][,I,][ TimesNewRoman]]betweenthepricepaidtotheCityforthenewissueandthepricesatwhichthe proposalindicatesthesecurities 375,985,1146,1033][10][,I,][TimesNewRoman]]willbeinitiallyofferedto theinvestingpublic. [[1146,985,1168,1033][10][,I,][TimesNewRoman]] ProposalsfortheBondsmay containamaturityschedule providingforacombinationofserialbondsandtermbonds. All termbondsshallbesubjecttomandatorysinkingfundredemptionataprice ofparplus accrued interest tothedateofredemptionscheduledtoconform tothematurityschedulesetforthabove. In order to designatetermbonds, theproposalmustspecify “YearsofTermMaturities” inthespacesprovidedonthe proposalform. BOOKENTRYSYSTEMTheBondswillbeissuedbymeans ofa bookentrysystemwithnophysicaldistribution ofBondsmadetothepublic. TheBondswillbeissuedinfully registeredform and oneBond, representingtheaggregateprincipalamountoftheBondsmaturingineachyear, willberegisteredinthename ofCede & Co. asnomineeofThe DepositoryTrustCompany (“DTC”), NewYork, NewYork, whichwillactas securitiesdepositoryfortheBonds. IndividualpurchasesoftheBondsmaybemadeinthe principalamountof 5,000oranymultiplethereofofasinglematuritythroughbookentriesmadeonthebooksandrecords ofDTCanditsparticipants. Principalandinterestarepayablebytheregistrarto DTCor itsnomineeasregisteredowneroftheBonds. Transferof principal VI-07 SECURITYANDPURPOSE TheBondswillbegeneralobligationsoftheCityforwhichtheCitywillpledgeitsfullfaithandcredit andpowertolevydirectgeneraladvaloremtaxes. Inaddition, theCitywillpledgespecialassessments againstbenefitedproperties andnetrevenuesoftheCity’swaterandsanitarysewerutilitiesfor repaymentofaportionoftheBonds. TheproceedsoftheBondswillbeusedtofinance (i) variousstreet improvementprojects, (ii) variousutilityimprovements, and (iii) improvementsrelatedtotheCity’s RiverfrontRenaissanceProject. BIDDINGPARAMETERS Proposalsshallbefornotlessthan $3,421,940plusaccruedinterest, ifany, onthetotalprincipalamount oftheBonds. Noproposalcanbewithdrawnoramendedafterthetimesetforreceivingproposalsonthe SaleDateunlessthemeetingoftheCityscheduledforawardoftheBondsisadjourned, recessed, or continuedtoanotherdatewithoutawardoftheBondshavingbeenmade. Ratesshallbeinintegral multiplesof1/100or1/8of1%. Theinitialpricetothepublicforeachmaturityasstatedontheproposal mustbe98.0% orgreater. BondsofthesamematurityshallbearasingleratefromthedateoftheBonds tothedateofmaturity. Noconditionalproposalswillbeaccepted. ESTABLISHMENTOFISSUEPRICE InordertoprovidetheCitywithinformationnecessaryforcompliancewithSection148oftheInternal RevenueCodeof1986, asamended, andtheTreasuryRegulationspromulgatedthereunder (collectively, the “Code”), thePurchaserwillberequiredtoassisttheCityinestablishingtheissuepriceoftheBonds andshallcomplete, execute, anddelivertotheCitypriortotheclosingdate, awrittencertificationina formacceptabletothePurchaser, theCity, andBondCounsel (the “IssuePriceCertificate”) containing thefollowingforeachmaturityoftheBonds (and, ifdifferentinterestratesapplywithinamaturity, to eachseparateCUSIPnumberwithinthatmaturity): (i) theinterestrate; (ii) thereasonablyexpected initialofferingpricetothe “public” (assaidtermisdefinedinTreasuryRegulationSection1.148-1(f) the “Regulation”)) orthesaleprice; and (iii) pricingwiresorequivalentcommunicationssupportingsuch offeringorsaleprice. AnyactiontobetakenordocumentationtobereceivedbytheCitypursuanthereto maybetakenorreceivedonbehalfoftheCitybySpringsted. TheCityintendsthatthesaleoftheBondspursuanttothisTermsofProposalshallconstitutea competitivesale” asdefinedintheRegulationbasedonthefollowing: i) theCityshallcausethisTermsofProposaltobedisseminatedtopotentialbiddersina mannerthatisreasonablydesignedtoreachpotentialbidders; ii) allbiddersshallhaveanequalopportunitytosubmitabid; iii) theCityreasonablyexpectsthatitwillreceivebidsfromatleastthreebiddersthathave establishedindustryreputationsforunderwritingmunicipalbondssuchastheBonds; and iv) theCityanticipatesawardingthesaleoftheBondstothebidderwhoprovidesaproposal withthelowesttrueinterestcost, assetforthinthisTermsofProposal (See “AWARD” herein). AnybidsubmittedpursuanttothisTermsofProposalshallbeconsideredafirmofferforthepurchaseof theBonds, asspecifiedintheproposal. ThePurchasershallconstitutean “underwriter” assaidtermis definedintheRegulation. Bysubmittingitsproposal, thePurchaserconfirmsthatitshallrequireany agreementamongunderwriters, asellinggroupagreement, orotheragreementtowhichitisaparty relatingtotheinitialsaleoftheBonds, toincludeprovisionsrequiringcompliancewiththeprovisionsof theCodeandtheRegulationregardingtheinitialsaleoftheBonds. Ifalloftherequirementsofa “competitivesale” arenotsatisfied, theCityshalladvisethePurchaserof Insuchevent, anysuchfactpriortothetimeofawardofthesaleoftheBondstothePurchaser. proposalsubmittedwillnotbesubjecttocancellationorwithdrawal. Withintwenty-four (24) hours ofthenoticeofawardofthesaleoftheBonds, thePurchasershalladvisetheCityandSpringstedifa iii - VI-07 substantialamount” (asdefinedintheRegulation) ofanymaturityoftheBonds (and, ifdifferentinterest ratesapplywithinamaturity, toeachseparateCUSIPnumberwithinthatmaturity) hasbeensoldtothe publicandthepriceatwhichsuchsubstantialamountwassold. TheCitywilltreatsuchsalepriceasthe issueprice” forsuchmaturity, appliedonamaturity-by-maturitybasis. TheCitywillnotrequirethe PurchasertocomplywiththatportionoftheRegulationcommonlydescribedasthe “hold-the-offering- price” requirementfortheremainingmaturities, butthePurchasermayelectsuchoption. IfthePurchaser exercisessuchoption, theCitywillapplytheinitialofferingpricetothepublicprovidedintheproposal astheissuepriceforsuchmaturities. IfthePurchaserdoesnotexercisethatoption, itshallthereafter promptlyprovidetheCityandSpringstedthepricesatwhichasubstantialamountofsuchmaturitiesare soldtothepublic; providedsuchdeterminationshallbemadeandtheCityandSpringstednotifiedofsuch priceswhetherornottheclosingdatehasoccurred, untilthe10% testhasbeensatisfiedastoeach maturityoftheBondsoruntilalloftheBondsofamaturityhavebeensold. GOODFAITHDEPOSIT Tohaveitsproposalconsideredforaward, thePurchaserisrequiredtosubmitagoodfaithdeposittothe Cityintheamountof $34,600 (the “Deposit”) nolaterthan2:00P.M., CentralTimeontheSaleDate. TheDepositmaybedeliveredasdescribedhereinintheformofeither (i) acertifiedorcashier’scheck payabletotheCity; or (ii) awiretransfer. ThePurchasershallbesolelyresponsibleforthetimely deliveryofits Depositwhetherbycheckorwiretransfer. NeithertheCity norSpringstedhaveany liabilityfordelaysinthereceiptoftheDeposit. IftheDepositisnotreceivedbythespecifiedtime, the Citymay, atitssolediscretion, rejecttheproposalofthelowestbidder, directthesecondlowestbidderto submitaDeposit, andthereafterawardthesaletosuchbidder. 300,1392,841,1445][11][,I,][TimesNewRoman]]CertifiedorCashier’sCheck [[839,1392,2263, 1445][11][,,][Times NewRoman]]. ADeposit madebycertifiedorcashier’scheck willbeconsideredtimelydeliveredtotheCityifit ismadepayabletotheCityand deliveredtoSpringstedIncorporated, 380JacksonStreet, Suite 300, SaintPaul, Minnesota55101bythetime specifiedabove. 300,1567,561,1620][11][,I,][TimesNewRoman]]Wire Transfer [[560,1567,2263, 1620][11][,,][Times New Roman]]. ADepositmadebywirewill beconsideredtimelydeliveredtothe Cityuponsubmissionofafederalwirereferencenumberbythespecifiedtime. Wiretransferinstructionswillbeavailablefrom Springstedfollowingthereceiptandtabulationofproposals. Thesuccessfulbidder mustsendan e-mailincludingthefollowinginformation: (i) thefederalreferencenumberand timereleased; ( ii) theamountofthewire transfer; and (iii) theissuetowhichitapplies. Onceanawardhasbeenmade, theDepositreceivedfromthePurchaserwill be retainedbytheCityandnointerestwillaccruetothePurchaser. The amountoftheDeposit willbedeductedatsettlementfromthe purchaseprice. Intheevent thePurchaserfails tocomplywiththeacceptedproposal, said amount willberetainedbytheCity. AWARDTheBondswill beawardedonthebasisofthelowestinterestrateto be determinedonatrueinterest cost TIC) basiscalculatedontheproposalpriortoanyadjustmentmadebytheCity. TheCity's computationoftheinterestrateof eachproposal, inaccordance withcustomarypractice, willbecontrolling. TheCitywillreservetherightto: (i) waivenon-substantiveinformalitiesof anyproposalorofmattersrelatingtothereceiptofproposalsandaward oftheBonds, (ii) reject allproposalswithoutcause, and iii) rejectanyproposalthattheCitydetermines tohavefailedtocomplywiththeterms herein. BONDINSURANCEATPURCHASER'SOPTIONnotTheCityhas appliedforor pre-approvedacommitmentforanypolicyofmunicipalbondinsurancewithrespect tothe Bonds. IftheBondsqualifyformunicipalbondinsuranceandabidderdesiresto purchase apolicy, suchindication, thematuritiestobe insured, andthenameofthedesired insurermustbe set VI-07 municipalbondinsurertoissuethepolicyaftertheawardoftheBondsshallnotconstitutecausefor failureorrefusalbythesuccessfulbiddertoacceptdeliveryoftheBonds. CUSIPNUMBERS IftheBondsqualifyforassignmentofCUSIPnumberssuchnumberswillbeprintedontheBonds, but neitherthefailuretoprintsuchnumbersonanyBondnoranyerrorwithrespecttheretowillconstitute causeforfailureorrefusalbythePurchasertoacceptdeliveryoftheBonds. TheCUSIPServiceBureau chargefortheassignmentofCUSIPidentificationnumbersshallbepaidbythePurchaser. SETTLEMENT OnoraboutJuly18, 2018, theBondswillbedeliveredwithoutcosttothePurchaserthroughDTCin NewYork, NewYork. DeliverywillbesubjecttoreceiptbythePurchaserofanapprovinglegalopinion ofBriggsandMorgan, ProfessionalAssociation, ofMinneapolis, Minnesota, andofcustomaryclosing papers, includingano-litigationcertificate. Onthedateofsettlement, paymentfortheBondsshallbe madeinfederal, orequivalent, fundsthatshallbereceivedattheofficesoftheCityoritsdesigneenot laterthan12:00Noon, CentralTime. UnlesscompliancewiththetermsofpaymentfortheBondshas beenmadeimpossiblebyactionoftheCity, oritsagents, thePurchasershallbeliabletotheCityforany losssufferedbytheCitybyreasonofthePurchaser'snon-compliancewithsaidtermsforpayment. CONTINUINGDISCLOSURE OnthedateofactualissuanceanddeliveryoftheBonds, theCitywillexecuteanddeliveraContinuing DisclosureUndertaking (the “Undertaking”) whereundertheCitywillcovenantforthebenefitofthe ownersoftheBondstoprovidecertainfinancialandotherinformationabouttheCityandnoticesof certainoccurrencestoinformationrepositoriesasspecifiedinandrequiredbySECRule15c2-12(b)(5). OFFICIALSTATEMENT TheCityhasauthorizedthepreparationofaPreliminaryOfficialStatementcontainingpertinent informationrelativetotheBonds, andsaidPreliminaryOfficialStatementhasbeendeemedfinalbythe CityasofthedatethereofwithinthemeaningofRule15c2-12oftheSecuritiesandExchange Commission. ForcopiesofthePreliminaryOfficialStatementorforanyadditionalinformationpriorto sale, anyprospectivepurchaserisreferredtotheMunicipalAdvisortotheCity, SpringstedIncorporated, 380JacksonStreet, Suite300, SaintPaul, Minnesota55101, telephone (651) 223-3000. AFinalOfficialStatement (asthattermisdefinedinRule15c2-12) willbeprepared, specifyingthe maturitydates, principalamounts, andinterestratesoftheBonds, togetherwithanyotherinformation requiredbylaw. ByawardingtheBondstothePurchaser, theCityagreesthat, nomorethanseven businessdaysafterthedateofsuchaward, itshallprovidewithoutcosttothePurchaserupto25copies oftheFinalOfficialStatement. TheCitydesignatesthePurchaserasitsagentforpurposesofdistributing copiesoftheFinalOfficialStatementtoeachsyndicatemember, ifapplicable. ThePurchaseragreesthat ifitsproposalisacceptedbytheCity, (i) itshallacceptdesignationand (ii) itshallenterintoacontractual relationshipwithitssyndicatemembersforpurposesofassuringthereceiptoftheFinalOfficial Statementbyeachsuchsyndicatemember. DatedMay21, 2018 BYORDEROFTHECITYCOUNCIL s/ JulieFlaten AdministrativeServicesDirector v - VI-07 7843303v1 VI-07