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HomeMy WebLinkAboutResolution No. 102-24 - Resolution - Providing for the Competitive Negotiated Sale of $11,400,000 Taxable GO Abatement & CIP Bonds Series 2024A RESOLUTION Providing for the Competitive Negotiated Sale of $11,400,000 Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A. A. WHEREAS, the Common Council of the City of Rochester, Minnesota (the “City”) has heretofore determined that it is necessary and expedient to issue its $11,400,000 Taxable General Obligation Abatement and Capital Improvement Plan Bonds, Series 2024A (the “Bonds”) to finance improvements related to the City’s Mayo Civic Center, City Library, and City Hall to replace the steam heating and cooling system with a district heating and cooling system; and B. WHEREAS, the City has retained Baker Tilly Municipal Advisors, LLC (“Baker Tilly MA”), as its independent municipal 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 Baker Tilly MA 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 principal amount, 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, Director of Finance and other officers or employees of the City are hereby authorized to cooperate with Baker Tilly MA 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. RC110-156-948905.v1 PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2024. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2024. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 2 RC110-156-948905.v1 EXHIBIT A THE CITY HAS AUTHORIZED BAKER TILLY MUNICIPAL ADVISORS, LLC TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $11,400,000* CITY OF ROCHESTER, MINNESOTA TAXABLE GENERAL OBLIGATION ABATEMENT AND CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2024A (BOOK ENTRY ONLY) Proposals for the above-referenced Bonds (the “Bonds”) will be received by the City of Rochester, Minnesota (the “City”) on Monday, June 17, 2024 (the “Sale Date”) until 10:30 A.M., Central Time (the “Sale th Time”) at the offices of Baker Tilly Municipal Advisors, LLC (“Baker Tilly MA”), 30 East 7 Street, Suite 3025, Saint Paul, MN 55101, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at its meeting commencing at 6:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Baker Tilly MA will assume no liability for the inability of a bidder or its proposal to reach Baker Tilly MA prior to the Sale Time, and neither the City nor Baker Tilly MA shall be responsible for any failure, misdirection or error in the means of transmission selected by any bidder. 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. Completed, signed proposals may be submitted to Baker Tilly MA by email to bids@bakertilly.com, and must be received prior to the Sale Time. OR ® (b) Electronic Bidding. Proposals may also be received via PARITY. For purposes of the electronic ® bidding process, the time as maintained by PARITY shall constitute the official time with respect to all ® proposals submitted to PARITY. Each bidder shall be solely responsible for making necessary ® arrangements to access PARITY for purposes of submitting its electronic proposal 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 Bond 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 solely as a communication mechanism to conduct the electronic ® bidding for the Bonds, and PARITY is not an agent of the City. ® 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: ®nd PARITY, 1359 Broadway, 2 Floor, New York, New York 10018 Customer Support: (212) 849-5000 *Preliminary; subject to change. Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and controlled subsidiary of Baker Tilly US, LLP, an accounting firm. Baker Tilly US, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2024 Baker Tilly Municipal Advisors, LLC. A-1 RC110-156-948905.v1 DETAILS OF THE BONDS The Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2025. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Bonds will mature in the years and amounts* follows: 2026 $340,000 2030 $415,000 2034 $500,000 2038 $615,000 2042 $760,000 2027 $360,000 2031 $435,000 2035 $530,000 2039 $650,000 2043 $800,000 2028 $375,000 2032 $460,000 2036 $555,000 2040 $685,000 2044 $850,000 2029 $395,000 2033 $480,000 2037 $585,000 2041 $720,000 2045 $890,000 * 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 amount of any maturity or maturities in multiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1,000 of Bonds as that of the original proposal. Gross spread for this purpose is the differential between the price paid to the City for the new issue and the prices at which the proposal indicates the securities will be initially offered to the investing public. 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 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 for 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 lowest bidder (the “Purchaser”), as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR/PAYING AGENT The City will name the registrar/paying agent (the “Registrar”) which shall be subject to applicable regulations of the Securities and Exchange Commission. The City will pay for the services of the Registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2034, and on any day thereafter, to redeem Bonds due on or after February 1, 2035. 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 redeemed. 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 redemptions shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Bonds will be general Bonds 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 tax abatement revenue from certain abated parcels located within the City for repayment of a portion of the Bonds. The proceeds of the Bonds, along with available City funds will be used to (i) finance improvements related to the City’s Mayo Civic A-2 RC110-156-948905.v1 Center, City Library, and City Hall to replace the steam heating and cooling system with a district heating and cooling system and (ii) pay costs of issuance. TAXABILITY OF INTEREST The interest to be paid on the Bonds is included 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 income. BIDDING PARAMETERS Proposals shall be for not less than $11,400,000 (Par) plus accrued interest, if any, on the total principal amount of the Bonds. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity as stated on the proposal must be 98.0% or greater. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth herein. In order to designate term bonds, the proposal must specify “Years of Term Maturities” in the spaces provided on the proposal form. No proposal can be withdrawn or amended after the time set for receiving proposals on the Sale Date 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. 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 To have its proposal considered for award, the Purchaser is required to submit a good faith deposit via wire transfer to the City in the amount of $114,000 (the “Deposit”) no later than 1:30 P.M., Central Time on the Sale Date. The Purchaser shall be solely responsible for the timely delivery of its Deposit, and neither the City nor Baker Tilly MA have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder. A Deposit will be considered timely delivered to the City upon submission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Baker Tilly MA following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to which it applies. Once an award has been made, the Deposit received from the Purchaser will be retained by the City and no interest will accrue to the Purchaser. The amount of the Deposit will be deducted at settlement from the purchase price. 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 on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. 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. CUSIP NUMBERS A-3 RC110-156-948905.v1 If the Bonds qualify for the assignment of CUSIP numbers such numbers will be printed on the Bonds; however, 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. Baker Tilly MA will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SETTLEMENT On or about July 17, 2024, 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 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 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 a Preliminary Official Statement containing pertinent information relative to the Bonds, and said Preliminary Official Statement has been deemed final by the City as of the date thereof within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For an electronic copy of the Preliminary Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the City, Baker Tilly Municipal Advisors, LLC, by telephone (651) 223-3000, or by email bids@bakertilly.com. A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared, specifying the maturity dates, principal amounts, and interest rates of the Bonds, together with any other information required by law. By awarding the Bonds to the Purchaser, the City agrees that, no more than seven business days after the date of such award, it shall provide to the Purchaser an electronic copy of the Final Official Statement. The City designates the Purchaser as its agent for purposes of distributing the Final Official Statement to each syndicate member, if applicable. The Purchaser agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with its syndicate members for purposes of assuring the receipt of the Final Official Statement by each such syndicate member. Dated May 20, 2024 BY ORDER OF THE CITY COUNCIL /s/ Kelly Geistler City Clerk A-4 RC110-156-948905.v1