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HomeMy WebLinkAboutResolution 2018-25 Issuance and Sale of General Obligation BondCity of Corcoran County of Hennepin State of Minnesota Extract of Minutes of Meeting of the City Council of the City of Corcoran,, Hennepin County, Minnesota April 12', 2018 Pursuant to due call and notice thereof a regular meeting of the City Council of the City of Corcoran, Hennepin County, Minnesota, was held at the City Hall in the City on Thursday, April 12, 2018, commencing at 7:00 P.M. The following members of the Council were present: and the following were absent: The following resolution was presented by Councilmember Bottema who moved its adoption: RESOLUTION NO. 2018-25 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF APPROXIMATELY $1,865,000 GENERAL OBLIGATION BONDS, SERIES 2018A BE IT RESOLVED By the City Council of the City of Corcoran, Hennepin County, Minnesota (the "City") as follows: 1. Background. It is hereby determined that: (a) the City is authorized by Minnesota Statutes, Chapter 475 and Minnesota Statutes, Sections 412.301 and 469.1812 through 469.1815 (collectively the "Act") to issue and sell its general obligation bonds to finance the acquisition of park land and the purchase of equipment (the "Proj ect"). 1 (b) it is necessary and expedient to the sound financial management of the affairs of the City to issue approximately $1,865,000 General Obligation Bonds, Series 2018A (the "Bonds ") pursuant to the Act to provide financing for the Project. 2. Sale of Bonds. To finance the Project pursuant to the Act, the City will therefore issue and sell the Bonds in the proposed aggregate principal amount of $1,865,000, which amount is subject to adjustment in accordance with the official Notice of Sale attached hereto as EXHIBIT A (the "Notice of Sale "). The Bonds will be issued, sold, and delivered in accordance with the Notice of Sale. 3. Authority of Municipal Advisor. Northland Securities, Inc. is authorized and directed to negotiate the Bonds in accordance with the foregoing Notice of Sale. The City Council will meet at 7:00 P.M. on Thursday, May 10, 2018, to consider proposals on the Bonds and take any other appropriate action with respect to the Bonds. 4. Authority of Bond Counsel. The law firm of Kennedy & Graven, Chartered, as bond counsel for the City, is authorized to act as bond counsel and to assist in the preparation and review of necessary documents, certificates and instruments relating to the Bonds. The officers, employees and agents of the City are hereby authorized to assist Kennedy & Graven, Chartered in the preparation of such documents, certificates, and instruments. 5. Covenants. In the resolution awarding the sale of the Bonds the City Council will set forth the covenants and undertakings required by the Act. 6. Official Statement. In connection with the sale of the Bonds, the officers or employees of the City are authorized and directed to cooperate with Northland Securities, Inc. 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. (The remainder of this page is intentionally left blank.) 2 EXHIBIT A NOTICE OF SALE $10500* GENERAL OBLIGATION BONDS, SERIES 2018A CITY OF CORCORAN,, MINNESOTA (Book-Entry Only) NOTICE IS HEREBY GIVEN that these Bonds will be offered for sale according to the following terms: TIME AND PLACE: Proposals (also referred to herein as "bids") will be opened by the City Administrator, or designee, on Thursday, May 10, 2018, at 10:30 A.M., CT, at the offices of Northland Securities,, Inc. (the City's "Municipal Advisor"), 150 South Fifth Street, Suite 3300, Minneapolis, Minnesota 55402. Consideration of the Proposals for award of the sale will be by the City Council at its meeting at the City Offices beginning Thursday, May 10, 2018 at 7:00 P.M., CT. SUBMISSION OF PROPOSALS Proposals may be: a) submitted to the office of Northland Securities, Inc., b) faxed to Northland Securities, Inc. at 612-851-5918, c) for proposals submitted prior to the sale, the final price and coupon rates may be submitted to Northland Securities, Inc. by telephone at 612-851-5900 or 612-851-4945, or d) submitted electronically. Notice is hereby given that electronic proposals will be received via PARITY TM . or its successor, in the manner described below,, until 10:30 A.M., CT, on Thursday, May 10, 2018. Proposals may be submitted electronically via PARITyTM or its successor, pursuant to this Notice until 10:30 A.M., CT, but no Proposal will be received after the time for receiving Proposals specified above. To the extent any instructions or directions set forth in PARITyTM , or its successor, conflict with this Notice, the terms of this Notice shall control. For further information about PARITyTM . or its successor, potential bidders may contact Northland Securities, Inc. or i -Deal® at 1359 Broadway, 2nd floor, New York, NY 10018, telephone 212-849-5021. Neither the City nor Northland Securities, Inc. assumes any liability if there is a malfunction of PARITyTM or its successor. 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. The City reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or decrease will be made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread. 3 BOOK-ENTRY SYSTEM The Bonds will be issued by means of a book-entry system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of 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 City through Northland Trust Services, Inc. Minneapolis, Minnesota (the "Paying Agent/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 successful bidder, as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. The City will pay reasonable and customary charges for the services of the Paying Agent/Registrar. DATE OF ORIGINAL ISSUE OF BONDS Date of Delivery (Estimated to be May 31, 2018) AUTHORITY/PURPOSE/SECURITY The Bonds are being issued pursuant to Minnesota Statutes, Sections 469.1812-469.1815 and 412.301. Proceeds will be used to finance the acquisition of park land and the purchase of equipment. The Bonds are payable from an annual tax abatement levy and additionally secured by ad valorem taxes on all taxable property within the City. The fall faith and credit of the City is pledged to their payment and the City has validly obligated itself to levy ad valorem taxes in the event of any deficiency in the debt service account established for this issue. INTEREST PAYMENTS Interest is due semiannually on each February I and August 1, commencing February 1, 2019, to registered owners of the Bonds appearing of record in the Bond Register as of the close of business on the fifteenth day (whether or not a business day) of the calendar month preceding such interest payment date. UV VA Principal is due annually on February 1, inclusive, in each of the years and amounts as follows: Year Amount Year Amount Year Amount 2020 $130,000 2025 $150,000 2030 $90,000 2021 135,000 2026 150,000 2031 90,000 2022 140,000 2027 155,000 2032 95,000 2023 140,000 2028 160,000 2033 100,000 2024 145,000 2029 85,000 2034 100,000 11 Proposals for the Bonds may contain a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory redemption in each year conforms to the maturity schedule set forth above. INTEREST RATES All rates must be in integral multiples of 1/20th or 1/8th of I%. Rates must be in level or ascending order. All Bonds of the same maturity must bear a single uniform rate from date of issue to maturity. ESTABLISHMENT OF ISSUE PRICE (HOLD-THE-OFFERING-PRICE RULE MAY APPLY -BIDS NOT CANCELLABLE) The winning bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at closing an "issue price" or similar certificate setting forth the reasonably expected initial offering price to the public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and Bond Counsel. All actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the City by the City's Municipal Advisor and any notice or report to be provided to the City may be provided to the City's Municipal Advisor. The City intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining "competitive sale" for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the "competitive sale requirements") because: (1) the City shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2) all bidders shall have an equal opportunity to bid; (3) the City may receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (4) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest cost), as set forth in this Notice of Sale. Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. In the event that the competitive sale requirements are not satisfied, the City shall promptly so advise the winning bidder. The City may then determine to treat the initial offering price to the public as of the award date of the Bonds as the issue price of each maturity by imposing on the winning bidder the Hold- the-Offering-Price Rule as described in the following paragraph (the "Hold-the-Offering-Price Rule"). Bids will not be subject to cancellation in the event that the City determines to apply the Hold-the- Offering-Price Rule to the Bonds. Bidders should prepare their bids on the assumption that the Bonds will be subject to the Hold-the-Offering-Price Rule in order to establish the issue price of the Bonds. By submitting a bid, the winning bidder shall (i) confirm that the underwriters have offered or will offer the Bonds to the public on or before the date of award at the offering price or prices (the "Initial Offering Price"), or at the corresponding yield or yields, set forth in the bid submitted by 61 the winning bidder and (ii) agree, on behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor sell unsold Bonds of any maturity to which the Hold- the - Offering Price Rule shall apply to any person at a price that is higher than the Initial Offering Price to the public during the period starting on the award date for the Bonds and ending on the earlier of the following: (1) the close of the fifth (5t11) business day after the award date; or (2) the date on which the underwriters have sold at least 10% of a maturity of the Bonds to the public at a price that is no higher than the Initial Offering Price to the public (the "10% Test"), at which time only that particular maturity will no longer be subject to the Hold-the-Offering-Price Rule. The City acknowledges that, in making the representation set forth above, the winning bidder will rely on (i) the agreement of each underwriter to comply with the Hold-the-Offering-Price Rule, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the Hold-the-Offering-Price Rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the Hold-the- Offering-Price Rule, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement regarding the Hold-the-Offering-Price Rule and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker- dealer that is a party to a retail distribution agreement to comply with its corresponding agreement regarding the Hold-the-Offering-Price Rule as applicable to the Bonds. By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to comply with the Hold-the-Offering- Price Rule, if applicable, in each case if and for so long as directed by the winning bidder and as set forth in the related pricing wires, and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to comply with the Hold-the-Offering-Price Rule, if applicable, in each case if and for so long as directed by the winning bidder or such underwriter and as set forth in the related pricing wires. Notes.- Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale: (1) 'public " means any person other than an underwriter or a related party, (2) "underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public). a purchaser of any of the Bonds is a "related party " to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting no power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation or another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership (3) by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (4) sale date "means the date that the Bonds are awarded by the City to the winning bidder. ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER PROPOSALS The City reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or decrease will be made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread. Such adjustments shall be made promptly after the sale and prior to the award of Proposals by the City and shall be at the sole discretion of the City. The successful bidder may not withdraw or modify its Proposal once submitted to the City for any reason, including post-sale adjustment. Any adjustment shall be conclusive and shall be binding upon the successful bidder. OPTIONAL REDEMPTION Bonds maturing on February 1, 2027 through 2034 are subject to redemption and prepayment at the option of the City on February 1, 2026 and any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and principal amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. MAW 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 shall constitute cause for a failure or refusal by the successful bidder thereof to accept delivery of and pay for the Bonds in accordance with terms of the purchase contract. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the successful bidder. Delivery of the Bonds will be within forty days after award, subject to an approving legal opinion by Kennedy & Graven, Chartered, Bond Counsel. The legal opinion will be paid by the City and delivery will be anywhere in the continental United States without cost to the successful bidder at DTC. TYPE OF PROPOSAL Proposals of not less than $1,844,485 (98.90%) and accrued interest on the principal sum of $1,865,000 must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality. Proposals for the Bonds should be delivered to Northland Securities, Inc. and addressed to: 7 Brad Martens, City Administrator Corcoran City Hall 8200 County Road 116 Corcoran, Minnesota 55340 A good faith deposit (the "Deposit") in the amount of $37,300 in the form of a federal wire transfer (payable to the order of the City) is only required from the apparent winning bidder, and must be received within two hours after the time stated for the receipt of Proposals. The apparent winning bidder will receive notification of the wire instructions from the Municipal Advisor promptly after the sale. If the Deposit is not received from the apparent winning bidder in the time allotted, the City may choose to reject their Proposal and then proceed to offer the Bonds to the next lowest bidder based on the terms of their original proposal, so long as said bidder wires funds for the Deposit amount within two hours of said offer. The City will retain the Deposit of the successful bidder, the amount of which will be deducted at settlement and no interest will accrue to the successful bidder. In the event the successful bidder fails to comply with the accepted Proposal, said amount will be retained by the City. No Proposal can be withdrawn 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. 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. In the event of a tie, the sale of the Bonds will be awarded by lot. 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. INFORMATION FROM SUCCESSFUL BIDDER The successful bidder will be required to provide, in a timely manner, certain information relating to the initial offering price of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions of the Internal Revenue Code of 1986, as amended. OFFICIAL STATEMENT 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 to the senior managing underwriter of the syndicate to which the Bonds are awarded, the Final Official Statement in an electronic format as prescribed by the Municipal Securities Rulemaking Board (MSRB). �69 FULL CONTINUING DISCLOSURE UNDERTAKING The City will covenant in the resolution awarding the sale of the Bonds and in a Continuing Disclosure Undertaking to provide, or cause to be provided, annual financial information, including audited financial statements of the City, and notices of certain material events, as required by SEC Rule 15c2-12. BANK QUALIFICATION The City will designate the Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. BOND INSURANCE AT UNDERWRITER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the successful bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the successful bidder of the Bonds. Any increase in the costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the successful bidder, 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 successful bidder. Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the successful bidder shall not constitute cause for failure or refusal by the successful bidder to accept delivery on the Bonds. The City reserves the right to reject any and all Proposals, to waive informalities and to adjourn the sale. Dated: April 12, 2018 BY ORDER OF TIDE CORCORAN CITY COUNCIL /s/ Brad Martens City Administrator Additional information may be obtained from: Northland Securities, Inc. 150 South Fifth Street, Suite 3300 Minneapolis, Minnesota 55402 Telephone No.: 612-851-5900 X" The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Keefe, and upon vote being taken thereon the following members voted in favor of the motion: Mayor Thomas, Councilmember Bottema, Councilmember Dejewski, Councilmember Keefe, and Councilmember LaFave and the following voted against: none whereupon the resolution was declared duly passed and adopted. 10 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) CITY OF CORCORAN ) I, the undersigned, being the duly qualified and acting City Administrator of the City of Corcoran, 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 Thursday, April 12, 2018, 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 approximately $1,865,000 General Obligation Bonds, Series 2018A of the City. WITNESS My hand as City Administrator and the corporate seal of the City this 12th day of April 2018. (SEAL) 11 City Administrator City of Corcoran, Minnesota