HomeMy WebLinkAboutResolution No. 337-10 ate"
• EXTRACT OF MINUTES OF A MEETING OF THE
COMMON COUNCIL OF THE
CITY OF ROCHESTER, MINNESOTA
HELD: August 16, 2010
Pursuant to due call and notice thereof, a regular meeting of the Common Council of the
City of Rochester, Olmsted County, Minnesota, was duly held at-the Council/Board Chambers in
the Government Center on August 16, 2010 commencing at 7:00 P.M. for the purpose in part of
authorizing the competitive negotiated sale of the $26,700,000 Taxable General Obligation
Bonds, Series 2010A of said City.
The following members were present: President Pro-Tem Bob Nowicki, Councilmembers
Mark Bilderback, Ed Hruska, Sandra Means, Bruce Snyder, Michael Wojcik.
and the following were absent: President Dennis Hanson
Member Wojcik introduced the following resolution and moved its adoption:
CITY OF ROCHESTER
• COUNTY OF OLMSTED
STATE OF MINNESOTA
RESOLUTION NO.,337-10
RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED
SALE OF $26,700,000
TAXABLE GENERAL OBLIGATION BONDS,
SERIES 2010A
A. WHEREAS, the federal American Recovery and Reinvestment Tax Act of 2009
provides for the issuance of"Build America Bonds" in 2009 and 2010 which bear taxable
interest but for which the issuer will receive payment of a refundable tax credit for each interest
payment equal to 35% of such taxable interest; and
B. WHEREAS,the interest cost to the City of Rochester, Minnesota (the"City ")
after the receipt of such tax credits may be lower than the interest cost of tax-exempt bonds, and
it is desirable to determine the lowest interest cost to the City by soliciting alternate proposals for
the above referenced bonds as either tax-exempt bonds or as taxable Build America Bonds; and
C. WHEREAS, the Common Council of the City has heretofore determined that it is
necessary and expedient to issue its Taxable General Obligation Bonds, Series 2010A (the
• "Bonds")to finance the construction of certain capital improvements in the City pursuant to the
City's Capital Improvement Plan adopted pursuant to Minnesota Statutes, Section 475.521 and to
372956v1 NMD RC110-21
O finance the acquisition of certain capital equipment for the City pursuant to Minnesota Statutes,
Section 412.301; and
D. WHEREAS,the City has retained Springsted Incorporated, in Saint Paul,
Minnesota("Springsted"), as its independent financial advisor and is therefore authorized to sell
these obligations by a competitive negotiated sale in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(9); and
NOW, THEREFORE,BE IT RESOLVED by the Common Council of the City of
Rochester, Minnesota, as follows:
1. Authorization; Findings. The Common Council hereby authorizes Springsted to
solicit bids for the competitive negotiated sale of the Bonds.
2. Meeting-, Bid Opening. This Common Council shall meet at the time and place
specified in the Terms of Proposal attached hereto as Exhibit A for the purpose of considering
sealed bids for, and'awarding the sale of,the Bonds. The.Clerk, or designee, shall open bids at
the time and place specified in such Terms of Proposal:
3. Terms of Proposal. The terms and conditions of the Bonds and the
negotiation thereof are fully set forth in the "Terms of Proposal" attached hereto as Exhibit A
and hereby approved and made a part hereof.
4. Official Statement. In connection with said competitive negotiated sale, the
• Clerk, Finance Director and other officers or employees of the City are hereby authorized to
cooperate with Springsted and participate in the preparation of an official statement for the
Bonds, and to execute and deliver it on behalf of the City upon its completion.
PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF
ROCHESTER, MINNESOTA, THIS 16TH DAY OF AUGUST, 2010.
PRESIDENT OF SAID COMMON
COUNCIL A
ATTEST:
CIT CL
Approved this 16th day of August, 2010.
• (Seal of the City of
Rochester, Minnesota) MAYOR OF SAID CITY
372956v1 MMDRC110-21 2
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
• ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$26,700,000�
CITY OF ROCHESTER, MINNESOTA
TAXABLE GENERAL OBLIGATION BONDS, SERIES 2010A
(BUILD AMERICA BONDS— DIRECT PAY)
OR
GENERAL OBLIGATION BONDS, SERIES 2010A
(BOOK ENTRY ONLY)
The City is requesting proposals for the above-named Issue optionally as conventional
tax-exempt general obligations (the "Tax-Exempt Bonds") or as taxable general obligations
which the City will elect to designate "Qualified Build America Bonds (Direct Pay)" (the "Taxable
Bonds"). Proposals for the Bonds and the Good Faith Deposit ("Deposit") will be received on
Monday, September 20, 2010, until 10:30 A.M., Central Time, at the offices of Springsted
Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals
will be opened and tabulated. Consideration for award of the Bonds will be by the City Council
at 7:00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
• 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 in which the Proposal is submitted.
(a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax
(651) 223-3046 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 (651) 223-3000 or fax
(651) 223-3046 for inclusion in the submitted Proposal.
OR
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
PARIT . For purposes of the electronic bidding process, the time as maintained by PARITY®
shall constitute the official time with respect to all Bids submitted to PARITY®. Each bidder
shall be solely responsible for making necessary arrangements to access PARITY`' for
purposes of submitting its electronic Bid in a timely manner and in compliance with the
requirements of the Terms of Proposal. Neither the City, its agents nor PARITY® shall have
any duty or obligation to undertake registration to bid for any prospective bidder or to provide or
ensure electronic access to any qualified prospective bidder, and neither the City, its agents nor
PARITY® shall be responsible for a bidder's failure to register to bid or for any failure in the
proper operation of, or have any liability for any delays or interruptions of or any damages
caused by the services of PARITY®. The City is using the services of PARITY® sole!y as a
communication mechanism to conduct the electronic bidding for the Bonds, and PARITY is not
• an agent of the City.
Preliminary;subject to change.
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If any provisions of this Terms of Proposal conflict with information provided by PARITY®, this
Terms of Proposal shall control. Further information about PARITY®, including any fee
• charged, may be obtained from:
PARITY®, 1359 Broadway, 2"d Floor, New York, New York 10018
Customer Support: (212) 849-5000
DETAILS OF THE BONDS
The Bonds will be dated as of the date of delivery, as the date of original issue, and will bear
interest payable on February 1 and August 1 of each year, commencing August 1, 2011.
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:
2013 $870,000 2019 $ 955,000 2025 $1,060,000 2031 $1,285,000
2014 $880,000 2020 $ 975,000 2026 $1,095,000 2032 $1,335,000
2015 $890,000 2021 $1,000,000 2027 $1,125,000 2033 $1,385,000
2016 $900,000 2022 $ 970,000 2028 $1,165,000 2034 $1,435,000
2017 $915,000 2023 $1,000,000 2029 $1;205,000 2035 $1,490,000
2018 $940,000 2024 $1,030,000 2030 $1,250,000 2036 $1,545,000
* The City reserves the right, after proposals are opened and prior to award, to increase or reduce the
principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or
reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal
amount of the Bonds is increased or reduced, any premium offered or any discount taken by the
successful bidder will be increased or reduced by a percentage equal to the percentage by which the
principal amount of the Bonds is increased or reduced.
• TERM BONDS
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds. In the event the Bonds are issued as Tax-Exempt Bonds, term bonds
will be allowed in all maturities. Term bonds are allowed for only the Bonds maturing in the
years 2022 and thereafter. All term bonds shall be subject to mandatory sinking fund
redemption at a price of par plus accrued interest to the date of redemption and must conform
to the maturity schedule set forth above. In order to designate term bonds, the proposal must
specify "Years of Term Maturities" in the spaces provided on the Proposal Form.
BOOK ENTRY SYSTEM
The Bonds will be lissued 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 Bond,
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.
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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, 2021, and on any day thereafter, to prepay Bonds due on or
after February 1, 2022. 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.
EXTRAORDINARY REDEMPTION
In the event the Bonds are designated and issued as Taxable Qualified Build America Bonds
(Direct Pay), the Bonds are subject to extraordinary redemption at the direction of the City if the
IRS determines, or is expected by the City to determine,..either prospectively or otherwise, that
Direct Payments are not payable with respect to the Bonds, or there is a change in law
eliminating or decreasing Direct Payments with respect to the Bonds. The redemption shall be
at a price of par plus accrued interest, and the redemption date shall be a date designated by
the City for which timely notice of redemption can be given.
An "Extraordinary Event" will have occurred if a material adverse change has occurred to
Section 54AA or 6431 of the Code (as such Sections were added by Section 1531 of the
• Recovery Act, pertaining to "Build America Bonds") pursuant to which the City's 35% direct
payment credit from the United States Treasury is reduced or eliminated.
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
certain items of capital equipment and capital improvements in accordance with the City's
current Capital Improvement Plan.
TAXABILITY OF INTEREST
In the event the Bonds are issued as Taxable Bonds, the interest to be paid on the Bonds is
includable in gross income of the recipient for United States and State of Minnesota income tax
purposes, and is subject to Minnesota Corporate and bank excise taxes measured by net
income.
BIDDING PARAMETERS
Bidders may provide proposals for the Bonds specifying interest rates for the Bonds if issued as
Tax-Exempt Bonds, or alternatively, specifying interest rates for the Bonds if issued as Taxable
Bonds. To comply with the "Build America Bond" provisions of the Internal Revenue Code of
1986, as amended (the "Code"), each proposal for the Taxable Bonds must specify the
expected reoffering (price for each maturity of the Bonds, and (i) each such reoffering price
cannot exceed the par amount of the maturity by more than .25% multiplied by the number of
complete years to the earlier of the maturity date or the first optional redemption date for the
maturity of the Bonds and (ii) in the initial offering no bond may be sold for a price in excess of
• such limit unless the IRS provides authoritative guidance to the contrary. Separate proposal
forms and Parity provisions have been provided for submitting proposals for the Bonds if to be
designated Tax-Exempt Bonds or designated Taxable Bonds.
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If the Bonds are issued as Tax-Exempt Bonds, the Bonds will be titled "General Obligation
• Bonds, Series 2010K.
Proposals for the Tax-Exempt Bonds shall be for not less than $26,433,000 (the "Minimum Bid")
and accrued interest on the total principal amount of the Bonds. Proposals for the Taxable
Bonds shall be for not less than the Minimum Bid and for not more than the Maximum Permitted
Price, as described below.
Maximum Maximum Maximum Maximum
Permitted Permitted Permitted Permitted
Year Price Year Price Year Price Year Price
2013 100.50% 2019 102.00% 2025 102.50% 2031 102,50%
2014 100.75% 2020 102.25% 2026 102.50% 2032 102.50%
2015 101.00% 2021 102.50% 2027 102.50% 2033 102.50%
2016 101.25% 2022 102.50% 2028 102.50% 2034 102.50%
2017 101.50% 2023 102.50% 2029 102.50% 2035 102.50%
2018 101.75% 2024 102.50% 2030 102.50% 2036 102.50%
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 are not required to be in level or ascending order;
however, the rate for any maturity cannot be more than 1% lower than the highest rate of any of
the preceding maturities. 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.
• GOOD FAITH DEPOSIT
Proposals, regardless of method of submission, shall be accompanied by a Deposit in the
amount of $267,000, in the form of a certified or cashier's check, a wire transfer, or Financial
Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be
opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether
by check, wire transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated
have any liability for delays in the transmission of the Deposit.
Any Deposit made by certified or cashier's check should be made payable to the City and
delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota
55101.
Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's
agent according to the following instructions:
Wells Fargo Bank, N.A., San Francisco, CA 94104
ABA#121000248
For credit to Springsted Incorporated, Account#635-5007954
Contemporaneously with such wire transfer, the bidder shall send an e-mail to
bond_services @springsted.com, including the following information; (i) indication that a wire
transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies,
and (iv) the return wire instructions if such bidder is not awarded the Bonds.
Any Deposit made by the successful bidder by check or wire transfer will be delivered to the
City following the award of the Bonds. Any Deposit made by check or wire transfer by an
unsuccessful bidder will be returned to such bidder following City action relative to an award of
the Bonds.
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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 pre-approved 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 underwriter is required to submit its Deposit to the City 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 Deposit received from the purchaser, the amount of which will be deducted at settlement,
will be deposited by the City 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.
AWARD
The Bonds will be awarded to the bidder offering the lowest interest rate to be determined on a
true interest cost (TIC) basis, treating the credit available to the City if the Bonds are issued as
Taxable Bonds constituting "Qualified Build America Bonds" as a reduction in each interest
payment. No proposal for the Taxable Bonds may require reoffering premiums in excess of the
maximums set for the Taxable Bonds issued as "Qualified Build America Bonds." 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 that 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 Bond 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
On or about October 19, 2010, the Bonds will be delivered without cost to the purchaser
through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an
approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of
- v-
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 that shall be received at
the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless
compliance with the terms of payment for the Bonds has 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
On the date of actual issuance and delivery of the Bonds, the City will execute and deliver a
Continuing Disclosure Undertaking (the "Undertaking") whereunder the City will covenant for
the benefit of the owners of the Bonds to provide certain financial and other information about
the City and notices of certain occurrences to information repositories as specified in and
required by SEC Rule 15c2-12(b)(5).
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,
380 Jackson Street,'Suite 300, Saint Paul, Minnesota 55101, telephone (651) 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 250 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 August 16, 2010 BY ORDER OF THE CITY COUNCIL
/s/Judy Schern
City Clerk
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•
Minutes of Meeting of: City of Rochester, Minnesota
Resolution(s)to be Adopted: $26,700,000 Taxable General Obligation Bonds, Series 2010A(Build America Bonds-Direct Pay)
Type of Meeting: Regular X_ OR Special
Meeting Date: 08/16/10 Meeting Time: 7:00 PM
Resolution# 337-10 (Series A)
Moved Seconded In
'Present Absent Resol. ResoL Favor Against
Dennis Hanson X
Ed Hruska X �-
Michael Wojcik X X X
Bruce Snyder X X
Mark Bilderback X — X-- - X
Bob Nowicki X X
Sandra Means X —X