HomeMy WebLinkAbout5.F.3. Setting Improvement Bond Sale-Res. No. 6412
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5F3
CONSENT
REVISED
CITY OF SHAKOPEE
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland1 Finance Director
SUBJ: Setting Improvement Bond Sale Res. No. 6412
DATE: May 11 2006
Introduction
Council action is needed for setting the sale of improvement
bonds for 2005 and 2006 projects.
Background
Attached is a resolution prepared by bond counsel that sets the
sale of improvement bonds. This is a routine event. The bonds
to be sold are in the amount of $31440,000. The financed
projects are Valley View/B3, 2005 Overlay, 2005 Recon and 2006
Recon.
The bond sale schedule is set to adopt this resolution on May
2nd, sell the bonds on June 6th with settlement in about 30 days..
The revision and increase in the amount of the bonds is due to a
correction on the estimated assessment prepay amounts.
The way the bonds are structured requires a transfer from the
General Fund for the 2/1/07 interest payment in the amount of
$15,580.
Action
Offer Resolution No. 6412 A Resolution Providing For The Issuance
and Sale of $3,440,000 General Obligation Improvement Bonds 1
Series 2006A, and move its adoption.
G~ Voxland
Finance Director
h\finance\cash\bonds\06Abonds
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Extract of Minutes of Meeting
of the City Council of the City
of Shakopee, Scott County, Minnesota
Pursuant to due call and notice thereof a regular meeting of the City Council of the City
of Shakopee, Scott County, Minnesota, was held at the City Hall in the City on Tuesday, May 2,
2006, commencing at 7:00 o'clock P.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.
RESOLUTlON PROVlDING FOR THE ISSUANCE AND SALE OF
$3,440,000 GENERAL OBLIGATlON IMPROVEMENT
BONDS, SERIES 2006A
BE IT RESOLVED By the City Council of the City of Shakopee, Scott County,
Minnesota (the "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 (the "Act"):
Proiect Designation & Description: Total Proiect Cost
Valley View CR 83; 2005 overlay; 2005 street reconstruction;
and 2006 street reconstruction
Proj ect Costs $3,375,955.00
Costs ofIssuance 31,150.00
Underwriter's Discount 29,240.00
Rounding Amount 3,655.00
Total $3,440,000.00
(b) it is necessary and expedient to the sound financial management of the
affairs of the City to issue $3,440,000 General Obligation Improvement Bonds, Series
2006A (the "Bonds") pursuant to the Act to provide financing for the Improvements.
(c) The City is authorized by Minnesota Statutes, section 475.60, subdivision
2(9) to negotiate the sale of the Bonds, it being determined that the City has retained an
independent financial adviser in connection with such sale. The actions of the City staff
and. financial advisers in negotiating the sale of the Bonds are ratified and confirmed in
all aspects.
2. To provide financing for the Improvements, the City will issue and sell Bonds in
the amount of $3,410,760. To provide in part the additional interest required to market the
Bonds at this time, additional Bonds will be issued in the amount of $29,240. The excess of the
purchase price of the Bonds over the sum of $3,410,760 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 ofthe following Terms of
Proposal:
(The remainder of this page is intentionally left blank.)
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE
THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE
FOLLOWING BASIS:
TERMS OF PROPOSAL
$3,440,000
CITY OF SHAKOPEE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2006A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, June 6, 2006, until 11 :30 A.M., Central
Time, at the offices of Springsted Incorporated, 38,0 Jackson Street, Suite 300, 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 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 inc1usionin
the submitted Proposal.
OR
(b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via
P ARITY@. For purposes of the electronic bidding process, the time as maintained by P ARITY@
shall constitute the official time with respect to all Bids submitted to P ARITY@. Each bidder
shall be solely responsible for making necessary arrangements to access P ARITYID 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 P ARITY@ 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
P ARITY@ 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 P ARITY@. The City is using the services of P ARITY@ solely as a
communication mechanism to conduct the electronic bidding for the Bonds, and P ARITY@ 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 P ARITY@, including any fee
charged, may be obtained from:
PARITY@, 1359 Broadway, 2nd Floor, New York, New York 10018
Customer Support: (212) 849-5000
DETAILS OF THE BONDS
The Bonds will be dated July 1, 2006, as the date of original issue, and will bear interest payable
on February 1 and August 1 of each year, commencing February 1, 2007. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February I in the years and amounts as follows:
2008 $310,000 2012 $340,000 2015 $370,000
2009 $315,000 2013 $350,000 2016 $380,000
2010 $325,000 2014 $360,000 2017 $360,000
2011 $330,000
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
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 "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 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
ofa single maturity through book entries made on the books and records of nTC 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 nTC; 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 1,2014, and on any day thereafter, to prepay Bonds due on or
after February 1, 2015. 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 nTC 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 properties. The proceeds will be used to finance various
projects within the City.
TYPEOF PROPOSALS
Proposals shall be for not less than $3,410,760 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 ora Financial Surety Bond in the amount of $34,400, payable to
the order of the City. If a check is used, it must accompany the 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
Deposit received from the purchaser, the amount of which will be deducted at settlement and no
interest will accrue to the purchaser, will be deposited by the City. Inthe 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 5/1 00 or 1/8 of 1 %. Rates must be in level or 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 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
Within 40 days following the date of their award, 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 theBonds 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 l5c2,..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 ofthe 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 l5c2-l2 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" ofthe 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 125 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 oftheFinal Official Statement.
Dated May 2, 2006 BY ORDER OF THE CITY COUNCIL
Is/ Judy Cox
City Clerk
.
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
7:00 o'clock P.M. on Tuesday, June 6, 2006, to consider proposals on the Bonds and take any
other appropriate action with respect to the Bonds.
4. 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.
(The remainder of this page is intentionally left blank.)
.
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.
..
STATE OF MINNESOTA )
)
COUNTY OF.SCOTT )
)
CITY OF SHAKOPEE )
I, the undersigned, being the duly qualified and acting City Clerk of the City of
Shakopee, 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 Tuesday, May 2,
2006, 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 $3,440,000 General Obligation
Improvement Bonds, Series 2006A of the City.
WITNESS My hand as City Clerk and the corporate seal of the City this ___ day of
,2006.
City Clerk
City of Shakopee, Minnesota
(SEAL)
288351vl(SJB)
SH155-174
5.F: 3.
CITY OF SHAKOPEE COt~srNT
Memorandum .~ ,,~~ t,.,
TO! Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg .Voxland, Finance Director
SUBJ: Setting Improvement Bond Sale Res. No. 6412
DATE: April 24, 2006
Introduction
Council action is needed for setting the sale of improvement
bonds for 2005 and 2006 projects.
Background
Attached is a resolution prepared by bond counsel that sets
the sale of improvement bonds. This is a routine event.
The bonds to be sold are in the amount of $3,155,000. The
financed projects are Valley View/83, 2005 Overlay, 2005
Recon and 2006 Recon.
The bond sale schedule is set to adopt this resolution on
May 2nd, sell the bonds on June 6th with settlement in about
30 days.
The way the bonds are structured requires a transfer from
the General Fund for the 2/1/07 interest payment in the
amount of $8,466.
Action
Offer Resolution No. 6412 A Resolution Providing For The
Issuance and Sale of $3,155,000 General Obligation
Improvement Bonds, Series 2006A, and move its adoption.
G~VOXland
Finance Director
h\finance\cash\bonds\OGAbonds
RESOLUTION NO. 6412
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF
$3,155,000 GENERAL OBLIGATION IMPROVEMENT
BONDS, SERIES 2006A
BE IT RESOLVED By the City Council of the City of Shakopee, Scott County,
. Minnesota (the "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
tothe provisionsofMinnesota Statutes, Chapter 429 (the"Act"):
Total Proiect Cost
Valley View CR 83; 2005 overlay; 2005 street reconstruction;
and 2006 street reconstruction
Project Costs. $3,093,455.00
Costs ofIssuance 31,150.00
Underwriter's Discount 26,817.50
Rounding Amount 3.577.50
Total $3,155,000.00
(b) it is necessary and expedient to the sound fmancial management of the
affairs of the City to issue $3,155,000 General Obligation Improvement Bonds, Series
2006A (the "Bonds") pursuant to the Act to provide financing for the Improvements.
(c) The City is authorized by Minnesota Statutes, section 475.60, subdivision
2(9) to negotiate the sale of the Bonds, it being determined that the City has retained an
independent financial adviser in connection with such sale. The actions of the City staff
and financial advisers in negotiating the sale of the Bonds are ratified and confirmed in .
all aspects.
2. To provide financing for the Improvements, the City will issue and sell Bonds in .
the amount of $3,128,183. To provide in part the additional interest required to market the
Bonds at this time, additional Bonds will be issued in the amotmt of $26,817. The excess of the
purchase price of the Bonds ove~ the sum of $3,128,183 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:
(The remainder ofthis page is intentionally left blank.)
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE
THIS ISSUE ON. ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE
FOLLOWING BASIS:
TERMS OF PROPOSAL
$3,155,000
CITY OF SHAKOPEE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2006A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, June 6, 2006, untHl1 :30 A.M., Central
Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, 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 7 :00 P.M., Central Time, of the same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability forthe 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 maybe 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
P ARITY@. 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 PARI~ 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 bidor for anyfailure 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 Cityisusing the services of PARITY@ solely as a
communication mechanism to conduct the electronic bidding for the Bonds, and P ARITY@ is not
an agent ofthe City.
If any provisions of this Terms of Proposal conflict with information provided by PARITyiID, this
TemlS of Proposal shall control. · Further information about P ARITY@, including any fee
charged, may be obtained from:
PARITY@, 1359 Broadway, 2nd Floor, New York, New York 10018
Customer Support: (212) 849-5000
DETAILS OF THE BONDS
The Bonds will be dated July 1, 2006, as the date of original issue, and will bear interest payable
on February 1 and August 1 of each year, commencing February 1, 2007. 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 yearsand amounts as
2008 $310,000 2012 $315,000 2015 $330,000
2009 $300,000 2013 $320,000 2016 $335,000
2010 $305,000 2014 $325,000 2017 $305,000
2011 $310,000
Proposals for the Bondsmay.containam~turity schedule providing for a combination of serial
bonds . and term bonds.. All term bonds shall besubject 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. . ~order to designate term bonds,. the proposal must specify "Years of
Telm 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 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 DepositoryTrust Company ("DTC"),
New York, New York, which will act as securities depository of the Bonds. Individual
purchases of the Bonds maybe made in the principal anlount 0[$5,000 or any multiple thereof
of a single maturity through book entries made on the hooks . and records of UTe 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 e1ecton February 1, 2014, and on any day thereafter, to prepay Bonds due on or
after February 1, 2015. Redemption maybe 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 nTC 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.; be.;ndicial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accmedinterest.
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 properties. The proceeds will be used to financeyariolls
projects within the City.
TYPE OF PROPOSALS
Proposals shall be for not less than $3,128,183 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 certifiedorcasID.er'scheckor a Financial SuretyBond in the amount of$31,550, payable to
the order of the . City. If a check is used, it must accompany the proposal. If a Financial Surety
Bond isused, 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
Deposit received from the purchaser, theamouut of which will be deducted at settlement and no
interest will accrue to the purchaser, will be deposited by the City. In the event the. purchaser
fails to comply with the accepted proposal, . saidamouut 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 level or 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 that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If tile Rondf~qualify for issuance of any policy of municipal bond insurance orco.mmitment
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 suchnurnbers'-Villbeprintedonthe
. 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.bythepurchaser to . accept delivery of the
Bonds. The CUSIP Service Bureau charge for the assignment of CUSIPidentification numbers
shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date oftheir award, 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 sufferedby the City
by reason ofthe purchaser's non-compliance with said terms for payment.
CONTINUING DISCLOSURE
In accordance with SECRule 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 ofthe 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, 380 Jackson. Street,
Suite 300, Saint Paul, Mhmesota 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 125 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 shallenter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring.
the receipt by each such Participating Underwriter ofthe Final Official Statement.
Dated May 2,2006 BY ORDER OF THE CITY COUNCIL
Isl Judith S. Cox
City Clerk
3. Springsted Incorporated is authorized and directed to negotiate the Bonds in
accordance with the foregoing Terms of Proposal. The City COlmcil will meet at
7:00 o'clock P.M. on Tuesday, June 6, 2006, to consider proposals on the Bonds and take any
other appropriate action with respect to the Bonds.
4. The law firm of Kennedy & Graven, Chartered, as bond counsel for the City, is
authorized to act as bond cOlmsel 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.
(The remainder ofthis page is intentionally left blank.) .
Adopted in session of the City Council of the City of Shakopee,
Minnesota, held this day of ,2006.
Mayor
ATTEST:
City Clerk
4
't
Recommendations
For
City of Shakopee, Minnesota
$3,155,000
General Obligation Improvement Bonds, Series 2006A
Presented to:
Honorable John Schmitt, Mayor
Members, City Council
Mr. Mark McNeill, City Administrator
Mr. Gregg Vox/and, Finance Director
City of Shakopee
129 Holmes Street South
Shakopee, MN 55379-1379
Study No.: S0750X4
SPRINGSTED Incorporated D Springsted
April 25, 2006
:t
RECOMMENDATIONS
Re: Recommendations for the Issuance of $3,155,000 General Obligation Improvement Bonds, Series 2006A
(the "Bonds" or "Issue")
We respectfully request your consideration of our recommendations for the above-named Issue.
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, June 6, 2006 at 11 :30 A.M., with
consideration for award by the City Council at
7:00 P.M. that same day.
3. Method of Sale The Bonds will be sold using a competitive bidding
process. In the interest of obtaining as many bids as
possible, we have included a provision in the attached
Terms of Proposal for underwriters to submit their bid
electronically through the electronic bidding platform of
PARITY@. In addition, physical bids (by phone or fax)
will be accepted at the offices of Springsted.
4. Authority for the Bonds The Bonds are being issued pursuant to Minnesota
Statutes, Chapters 475 and 429.
5. Repayment Term The Bonds will mature annually February 1, 2008
through 2017. Interest on the Bonds will be payable
semi-annually each February 1 and August 1,
commencing on February 1, 2007.
6. Security and Source of Payment
(a) Security The Bonds will be general obligations of the City,
secured by its full faith and credit and taxing power.
(b) Source of Payment The Bonds will be repaid from a combination of
general ad valorem tax levies and special
assessments filed against benefited properties.
7. Prepayment Provisions The City may elect on February 1, 2014, and on any
date thereafter, to prepay the Bonds due on or after
February 1, 2015 at a price of par plus accrued
interest.
,
City of Shakopee, Minnesota
April 25,2006
8. Credit Rating Comments An application will be made to Moody's Investors
Service for a rating on the Bonds. The City's general
obligation debt is currently rated "Aa3".
9. Term Bonds We have included a provision that permits the
underwriters to combine multiple maturity years into a
term bond, subject to mandatory redemption on the
same maturity schedule provided in the Terms of
Proposal. The advantage to the underwriter is that it
provides large blocks of bonds, which are more
attractive to bond funds, and certain pension funds.
This in turn is a benefit to the City since selling larger
blocks of bonds reduces the risk to the underwriter,
allowing them to lower their costs and the interest
coupons. Since the Bonds are being offered on a
competitive bid basis and awarded on the lowest true
interest cost, the City will award the Bonds to the best
bid regardless of whether term bonds are chosen or
not.
10. Federal Treasury Regulations Concerning Tax-
Exempt Obligations
(a) Bank Qualification Under Federal Tax Law, financial institutions cannot
deduct from income for federal income tax purposes,
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 generally receive slightly lower interest
rates than issues that are not bank qualified. Since
the City does not expect to issue more than
$10 million of tax-exempt obligations in 2006, this
Issue is designated bank qualified.
(b) Rebate Requirements 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
that may apply in both of these categories.
Page 2
,
City of Shakopee, Minnesota
April 25, 2006
Bond proceeds deposited to a project/construction
fund may qualify for exemption from rebate if it meets
a 6-month, 18-month, or 24-month spending
exception. The 18-month and the 24-month spending
exceptions require a certain percentage of the
proceeds be spent at six-month intervals. If one of the
applicable expenditure exceptions is met, the City
may retain the interest earnings. The spending
exceptions are based on actual expenditures and not
expectations.
(c) Bona Fide Debt Service Fund 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 fund to the yield on the Bonds. 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 for the prior year or
1/12 the debt service of the prior year.
With issues having special assessments pledged as a
source of repayment, additional diligence should be
exercised in monitoring the debt service fund due to
the potential accumulation of assessment
prepayments which could cause the fund to become
non-bona fide.
Springsted currently provides arbitrage rebate
services for the City under a separate contract. An
amendment to that contract adding this Issue has
been provided to City staff.
(d) Economic Life The average life of the Bonds cannot exceed 120% of
the economic life of the projects to be financed. The
economic life of the improvements being financed with
the proceeds of the Bonds is at least 20 years. The
average life of the Bonds is 6.143 years. Therefore
the Bonds meet the economic life requirements.
(e) Federal Reimbursement Regulations 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.
It is our understanding the City has taken whatever
Page 3
,
City of Shakopee, Minnesota
April 25,2006
actions are necessary to comply with the federal
reimbursement regulations in regards to the Bonds.
11. Continuing Disclosure The Bonds are subject to continuing disclosure
requirements set forth by the Securities and Exchange
Commission. The SEC rules require the City to
undertake an annual update of certain Official
Statement information and report any material events
to the national repositories.
Springsted currently provides continuing disclosure
services forthe City under a separate contract. An
amendment to that contract adding this Issue has
been provided to City staff.
12. Attachments . Sources and Uses of Funds
. Assessment Income Schedules
. Net Debt Service Schedule
. Terms of Proposal
DISCUSSION
Proceeds of the Bonds will be used to finance four improvements projects within the City as described below:
. Valley View CR 83 - street and utility construction, upgrade/expansion of a gravel road to Urban Street;
. 2005 Overlay - bituminous street overlay;
. 2005 Reconstruction - street and utility reconstruction in the older part of the City; and
. 2006 Reconstruction - street and utility reconstruction in the older part of the City.
The City expects to use $2,973,350 from various sources to reduce the borrowing amount. The additional sources
include transfers from various funds, prepayments of assessments and State Aid. The sources and uses for the
Bonds are shown on page 6. Page 6 shows the various sources of funding, the project amounts, costs of issuance
and underwriter's discount.
The Bonds will be repaid with. a combination of special assessments levied against benefited properties and ad
valorem property taxes. The assessments terms for the projects are outlined below:
Principal Amount Term Filina Date Rate
Valley View CR 83 $213,700 10 Years Nov-05 5.25%
2005 Overlay $12,180 . 1 Year Nov-05 5.25%
2005 Reconstruction $132,200 10 Years Nov-05 5.25%
2006 Reconstruction $1,114,170 10 Years Nov-06 5.75%*
*This rate is an assumed rate for purposes of structuring the Bonds and is subject to change when the Bonds sell.
Page 4
City of Shakopee, Minnesota
April25,2006
The City has received prepayments on the Valley View CR 83 project, the 2005 Overlay project and the
2005 Reconstruction project in the following amounts respectively: $353,800; $30,800; and $131,600. For the
2006 Reconstruction project, the City expects to receive $477,500 in prepayments. The City has chosen to use the
prepayments received and expected to be received. to reduce the par amount of the Bonds. The assessments are
structured with equal annual payments of principal. Interest on the unpaid balance of the assessments for Valley
View CR 83 project, the 2005 Overlay project and the 2005 Reconstruction project is 5.25%. For the 2006
Reconstruction project the unpaid balance of the assessments will be charged at a rate of 1.5% over the true
interest cost of the Bonds. For structuring purposes we have assumed a rate of 5.75%. Page 7 shows the
aggregate projected assessment income total. Pages 8 through 11 show the projections of assessment income for
each project.
The City will be required to levy taxes to pay a portion of the debt service on the Bonds. The City will make its first
levy for the Bonds in 2006 for first collection in 2007. Since the City will not have sufficient collection of
assessments to make the February 1. 2007 interest payment, the City will transfer money from the general fund in
an amount necessary to pay the difference. Thereafter, each year's collection of taxes and assessments will be
used to make the August 1 interest payment in the year of collection and the February 1 principal and interest
payment in the follOWing year.
The amortization schedule for the Bonds is shown on page 12. As directed by the City, debt service has been
structured around the projected annual assessment income to result in an even annual levy requirement over a term
of 10 years. Page 12 contains the following information:
. Columns 1 through 4 show the annual amounts of principal. estimated interest and total principal and
interest due on the Bonds.
. Column 5 shows the 5% overlevy required by State statute. The overlevy is a protection to the City and the
bondholders in the event of delinquencies in the collections of special assessments or taxes.
. Column 6 shows the projected assessment income developed on pages 8 through 11.
. Column 9 shows the projected annual levy requirement on the Bonds.
Based on projected assessment income, it is expected that the City will be required to levy ad valorem property
taxes for repayment of the Bonds averaging $219.300 annually.
Springsted pleased to again be of service to the City of Shako pee.
Respectfully submitted,
S5
Provided to Staff: Rebate and Continuing Disclosure Contract Amendments
Page 5
$3,155,000
City of Shakopee, Minnesota
General Obligation Improvement Bonds
Series 2006A
Sources & Uses
Dated 07/01/2006\ Delivered 07/01/2006
Sources Of Funds
Par Amount of Bonds. ............... ............ ....................... ..... .................. ..... ......... ................ ..................... ............... .......... $3,155,000.00
State Aid and SPUC Contribution.................................................................................................................................... 830,670.00
2006 Reconstruction Prepays.......... ............ ........ ............. ................................. .................. ......... ............ ...................... 477,500.00
Water Fund....................... ...... .......... ........................... .......... ............. ...... ........ .............. .................................... ............ 386,100.00
Sewer Fund........... ...... ... ..... .... ........ ... ..... .... ..... .............. ..... ...... ...... .................. ........... ... ....... ........... .......... .... ..... ........... 373,210.00
Valley View CR 83 Prepays................................................................. ....................... ......... ............................................ 353,800.00
Storm Fund.................... .......... ......... ........... ....... ....... .............. ............. ...... ......... ................ ....................... .................... 312,670.00
2005 Reconstruction Prepays........ ..... ................................. ................................. .......................................................... 131,060.00
CIF Fund............................................................................................. ............................................................................ 77,540.00
2005 Overlay Prepays........................... ..................................... ............................ ................................ ......................... 30,800.00
Total Sources............... .................................................................................... .................. ................... .................. ...... $6,128,350.00
Uses Of Funds
2006 Reconstruction.. .... ...... ............. .................. ........................................... ....................... .......................................... 3,949,180.00
2005 Reconstruction......................... ........... ............ ........ ............................................... ........... ................. ....... ............. 1,317,680.00
.VaUey View CR 83............................................................................... ................................................... ........................ 625,260.00
2005 Overlay............. ....... ....... ..... .......................... .................... .;.......... ................... ........... ........................................... 174,685.00
Costs of Issuance. ................................. ........................... .................... ................................ ........................................... 31,150.00
Total Underwriter's Discount (0.850%). .......... ................................................................ ................... .................. ...... ..... 26,817.50
Rounding Amount. ............................................................................... ................................................... ......... ..........1..... 3,577.50
Total Uses.......................... .............................................. .............................................................................................. $6,128,350.00
Series2oo6A I SINGLEPURPOSE I 4/18/2006 I 1:43PM
B Springsted I Page 6
$1,472,250
City of Shako pee, Minnesota
General Obligation Improvement Bonds
Series 2006A - Assessments
ASSESSMENT INCOME
Valley View 2005 2005 2006
Date CR83 Overlay Reconstruction Reconstruction Total P+I
12/31/2005 - - -
12/31/2006 34,459.13 12,926.03 21,317.25 68,702.41
12/31/2007 31,467.32 19,466.46 186,159.24 237,093.02
12/31/2008 30,345.40 18,772.40 169,075.30 218,193.10
12/3112009 29,223.48 18,078.36 162,668.82 209,970.66
12/31/2010 28,101.56 17,384.30 156,262.34 201,748.20
12/31/2011 26,979.62 16,690.26 149,855.86 193,525.74
12/31/2012 25,857.70 15,996.20 143,449.38 185,303.28
12/31/2013 24,735.78 15,302.16 137,042.92 177,080.86
12/31/2014 23,613.86 14.608.10 130,636.44 168,858.40
12/31/2015 22,491.92 13,914.06 124,229.96 160,635.94
12/31/2016 117,823.48 117,823.48
Total $277,275.77 $12,926.03 $171,529.55 $1,477,203.74 $1,938,935.09
Series2oo6A -Assessment {lssueSummary { 4/18/2006 {1:45PM
[~ Springsted I
Page 7
$213,700
City of Shakopee, Minnesota
General Obligation Improvement Bonds, Series 2006A
Assessment Income - Valley View CR 83
ASSESSMENT INCOME
Date Principal Coupon Interest Total P+I
12/31/2005 - - - -
12/31/2006 21,370.00 5.250% 13,089.13 34,459.13
12/31/2007 21,370.00 5.250% 10,097.32 31,467.32
12/31/2008 21,370.00 5.250% 8,975.40 30,345.40
12/31/2009 21,370.00 5.250% 7,853.48 29,223.48
12/31/2010 21,370.00 5.250% 6,731.56 28,101.56
12/31/2011 21,370.00 5.250% 5,609.62 26,979.62
12/31/2012 21,370.00 5.250% 4,487.70 25,857.70
12/31/2013 21,370.00 5.250% 3,365.78 24,735.78
12/31/2014 21,370.00 5.250% 2,243.86 23,613.86
12/31/2015 21,370.00 5.250% 1,121.92 22,491.92
Total $213,700.00 - $63,575.77 $277,275.77
SIGNIFICANT DATES
Filing Date. ................................................. ......... ....................... .......................................................................................... 11/01/2005
First Payment Date......... ..................................... ..... ............................................. ...'.. ................ ........... ........ ..... ................. 12/31/2006
Series2oo6A -Assessmenl I VnlJcyViewCK83 14/18/2006/ 1:45PM
~~ Springsted I Page 8
$12,180
City of Shakopee, Minnesota
General Obligation Improvement Bonds, Series 2006A
Assessment Income - 2005 Overlay
ASSESSMENT INCOME
Date Principal Coupon Interest ~ Total P+I
12/31/2005 - - - -
12/31/2006 12,180.00 5.250% 746.03 12,926.03
Total $12,180.00 - $746.03 $12,926.03
SIGNIFICANT DATES
Filing Date......................... ................................................... ............... .................................................................................. 11/01/2005
First Payment Date.... ................................. ........................................................................................................................... 12/31/2006
Series2oo6A -Assessment / 20050verJay /4/18/2006/ 1:45PM
g Springsted I Page 9
$132,200
City of Shakopee, Minnesota
General Obligation Improvement Bonds, Series 2006A
Assessment Income - 2005 Reconstruction
ASSESSMENT INCOME
Date Principal Coupon Interest Total P+I
12131/2005 - - - -
1213112006 13,220.00 5.250% 8,097.25 21,317.25
1213112007 13,220.00 5.250% 6,246.46 19,466.46
1213112008 13,220.00 5.250% 5,552.40 18,772.40
1213112009 13,220.00 5.250% 4,858.36 18,078.36
1213112010 13,220.00 5.250% 4,164.30 17,384.30
1213112011 13,220.00 5.250% 3,470.26 16,690.26
1213112012 13,220.00 5.250% 2,776.20 15,996.20
1213112013 13,220.00 5.250% 2,082.16 15,302.16
1213112014 13,220.00 5.250% 1,388.10 14,608.10
12/31/2015 13,220.00 5.250% 694.06 13,914.06
Total $132,200.00 - $39,329.55 $171,529.55
SIGNIFICANT DATES
Filing Date............................................ ........................ ....................................................... .............. .............. ..................... 1110112005
First Payment Date........ ...................... ...... .............. ..... ......... .................. ....................... .............. ...................... ................. 1213112006
Series2oo6A-Assessmen/ / 2oo5Kecons//Uc/ion / 4/18/2006/ 1:45PM
B Springsted I Page 10
.
$1,114,170
City of Shakopee, Minnesota
General Obligation Improvement Bonds, Series 2006A
Assessment Income - 2006 Reconstruction
ASSESSMENT INCOME
Date Principal Coupon Interest Total P+I
12/31/2006 - - - -
12/31/2007 111,417.00 5.750% 74,742.24 186,159.24
12/31/2008 111,417.00 5.750% 57,658.30 169,075.30
12/31/2009 111,417.00 5.750% 51,251.82 162,668.82
12/31/2010 111,417.00 5.750% 44,845.34 156,262.34
12/31/2011 111,417.00 5.750% 38,438.86 149,855.86
12/31/2012 111,417.00 5.750% 32,032.38 143,449.38
12/31/2013 111,417.00 5.750% 25,625.92 137,042.92
12/31/2014 111,417.00 5.750% 19,219.44 130,636.44
12/31/2015 111,417.00 0.750% 12,812,96 124.229,96
12/31/2016 111,417.00 5.750% 6,406.48 117,823.48
Total $1,114,170.00 - $363,033.74 $1,477,203.74
SIGNIFICANT DATES
Filin9 Date.................. ............................................................................................................................. .......................... 11/01/2006
First Payment Date............................................. .......... .................. ......... ................... .............. ............... ..... ............ ........ 12/31/2007
Series2oo6A -Assessment { 2oo6Keconstruction { 4/18/2006 {1:45PM
BSpringsted I Page 11
$3,155,000
City of Shakopee, Minnesota
General Obligation Improvement Bonds
Series 2006A
NET DEBT SERVICE SCHEDULE
.
Date Principal Coupon Interest Total P+I 105% of Total Assessment Levy Required
(1) (2) (3) (4) (5) (6) (7)
02/0112007 - - 73,494.17 73,494.17 77,168.88 68,702.41 8,466.47
02/01/2008 310,000.00 3.750% 125,990.00 435,990.00 457,789.50 237,093.02 220,696.48
02/0112009 300,000.00 3.800% 114,365.00 414,365.00 435,083.25 218,193.10 216,890.15
02/0112010 305,000.00 3.850% 102,965.00 407,965.00 428,363.25 209,970.66 218,392.59
02/01/2011 310,000.00 3.900% 91,222.50 401,222.50 421,283.63 201,748.20 219,535.43
02/01/2012 315,000.00 3.950% 79,132.50 394,132.50 413,839.13 193,525.74 220,313.39
02/01/2013 320,000.00 4.000% 66,690.00 386,690.00 406,024.50 185,303.28 220,721.22
02/01/2014 325,000.00 4.050% 53,890.00 378,890.00 397,834.50 177,080.86 220,753.64
02/01/2015 330,000.00 4.150% 40,727.50 370,727.50 389,263.88 168,858.40 220,405.48
02/01/2016 335,000.00 4.200% 27,032.50 362,032.50 380,134.13 160,635.94 219,498.19
02101/2017 305,000.00 4.250% 12,962.50 317,962.50 333,860.63 117,823.48 216,037.15
Total $3,155,000.00 - $788,471.67 $3,943,471.67 $4,140,645.25 $1,938,935.09 $2,201,710.16
Dated........................;... ............................................... ...................... ...... ...................................... ........... ................... ..................... ... 7/01/2006
Delivery Date..................... .............. ...................... ............. ........................................................ .................... ......................................... 7/01/2006
First Coupon Date............ .............. ........................................................................ ........... ................. ............... ................................ .......... 2/01/2007
Yield Statistics
Bond Year Dollars................. .............. ............................................... ...................... ..................... ................. ............. ...................... .......... $19,380.42
Average Life.... ........................................... ..................................... .................................... ..... ..... .......................................................... 6.143 Years
Average Coupon................... .................. ................... ........ ......................... ..... ......... ................................................................................... 4.0683938%
Net Interest Cost (NIC).. ...................... ......... ..... .................................. .......... ..... ........................ ........ ...... .................................. .................. 4.2067680%
True Interest Cost (TIC). ....... ............. ..... ......... ....................... ....... ................................... ........ .... .................... ........ .................................... 4.2228259%
Bond Yield for Arbitrage Purposes...... .......................................................................................... .......... .......................................... ................... 4.0606065%
All Inclusive Cost (AI C)...................................................................... ............................................ ............. ...... ........................................... 4.4136916%
IRS Fonn 8038
Net Interest Cost......... ...... .... ....... ....... .................................................... ............... ........... ............ .....;.... ....... ........................................... 4.0683938%
Weighted Average Maturity.............................. ..................................... ........................................ .......... .......................................................... 6.143 Years
Series 2006A / SINGlE PlllU'OSE I 4/18/2006 / 1:43PM
B1 Springsted I
' /~4,'"
/
Page 12
.
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$3,155,000
CITY OF SHAKOPEE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2006A
(BOOK ENTRY ONLY)
Proposals for the Bonds will be received on Tuesday, June 6,2006, until 11:30 A.M., Central
Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, 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 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 Biddina. 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 Biddina. Notice is hereby given that electronic proposals will be received via
PARI~. For purposes of the electronic bidding process, the time as maintained by PARI~
shall constitute the official time with respect to all Bids submitted to PARI~. Each bidder
shall be solely responsible for making necessary arrangements to access PARIJ'I> 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 PARI~ 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
PARI~ 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 PARI~. The City is using the services of PARI~ s~ as a
communication mechanism to conduct the electronic bidding for the Bonds, and PARI is not
an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARI~, this
Terms of Proposal shall control. Further information about PARIT)Ai>, including any fee
charged, may be obtained from:
PARI~, 1359 Broadway, 2nd Floor, New York, New York 10018
Customer Support: (212) 849-5000
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DETAILS OF THE BONDS
The Bonds will be dated July 1, 2006, as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2007. 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:
2008 $310,000 2012 $315,000 2015 $330,000
2009 $300,000 2013 $320,000 2016 $335,000
2010 $305,000 2014 $325,000 2017 $305,000
2011 $310,000
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
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
"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 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.
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, 2014, and on any day thereafter, to prepay Bonds due on or
after February 1, 2015. 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 properties. The proceeds will be used to finance
various projects within the City.
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I TYPE OF PROPOSALS
Proposals shall be for not less than $3,128,183 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 $31,550,
payable to the order of the City. If a check is used, it must accompany the 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 Deposit received from the purchaser, the amount of which will be deducted at settlement
and no interest will accrue to the purchaser, will be deposited by the City. 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 level or 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 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
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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 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 purchas~r 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 SEe Rule 15c2-12(b)(5), the City will undertak.e, 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,
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 125 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 May 2, 2006 BY ORDER OF THE CITY COUNCIL
/s/ Judy Cox
City Clerk
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