HomeMy WebLinkAbout[09b] Equipment CertificateCITY OF NT. JOSKPH
Council Agenda Item 9 %
MEETING DATE: March 18, 2010
AGENDA ITEM: Equipment Certificate
SUBMITTED BY: Finance
BOARD /COMMISSION /COMMITTEE RECOMMENDATION:
PREVIOUS COUNCIL ACTION: The Council discussed the list of proposed equipment for purchase
through issuance of an equipment certificate at the March 4, 2010 Council meeting. The Council
generally agreed to the equipment with clarification.
BACKGROUND INFORMATION: Since the last Council meeting the equipment list has been updated to
list funding that would be available from prior years. The total that could be available is $ 37,491. Staff
at the last meeting requested fully fund the equipment through issuance of the equipment certificate as
the certificate has been reduced and one of the major items was deleted. The funds that would have
been available from prior years would be re- allocated to the sweeper or seal coating. The funds for
2010 have not been included as with proposed LGA cuts it is uncertain as to whether or not the CIP will
be funded.
Included in the packet is a resolution for the negotiated sale, authorizing Northland Securities to move
forward. Northland Securities has sent a request to the two local financial institutions to see if they
would be interested in purchasing the bond issue as it is relatively small. At least one of the institutions
is interested.
The total of the equipment certificate will need to be verified on Thursday evening.
With regard to the plasma cutter, in checking on rental rates, the fee is $50.00 per day.
BUDGET /FISCAL IMPACT: Issuance of debt in the amount of $190,000 payable over a five year
period.
ATTACHMENTS: Request for Council Action 9(b):1
Financial Advisory Service Agreement 9(b):2 -4
List of Equipment 9(b):5
REQUESTED COUNCIL ACTION: Determine the amount of the equipment certificate and authorize
execution of the Financial Advisory Service Agreement authorizing a negotiated bond sale.
9(b):1
FINANCIAL ADVISORY SERVICE AGREEMENT
BY AND BETWEEN
THE CITY OF ST. JOSEPH, MINNESOTA
AND
NORTHLAND SECURITIES, INC.
This Agreement made and entered into by and between the City of St. Joseph, Minnesota (hereinafter
"City ") and Northland Securities, Inc., of Minneapolis, Minnesota (hereinafter "NSI ").
WHEREAS, the City desires to use the services of NSI related to the issuance of City bonds as described
herein ( "Debt "), and
WHEREAS, NSI desires to furnish services to the City as hereinafter described,
NOW, THEREFORE, it is agreed by and between the parties as follows:
SERVICES TO BE PROVIDED BY NSI
Debt Issuance:
Serve as the City's Financial Advisor for the issuance of the Debt. NSI shall provide all services;_,
necessary to analyze, structure, offer for sale and close the transaction. Examples of the services
include the following:
Planning and Development
* Meet with City officials and others as directed to define the scope and the objectives
* Assemble and analyze relevant statistical information.
* Prepare a preliminary feasibility study or discuss with City officials possible funding options
and the fiscal implications of each.
* Prepare details on the recommended options - information on the issue structure, method of
issuance, term, sale timing, call provisions, etc.
• Prepare a schedule of events related to the issuance process.
• Attend meetings of the City Council and other project and bond issue related meetings as
needed and as requested.
Bond Sales
* Prepare, cause to be printed, and distribute the Official Statement and Bid Form to prospective
bidders.
* Cause to be published the Official Notice of Sale if required by law.
* Recommend whether the issue should secure a bond rating. If the issue is to be rated, prepare
and furnish to the rating agencies the information they require to evaluate the issue and provide
their rating. Serve as the City's representative to the rating agencies.
* Directly contact underwriters most likely to serve as syndicate managers to assure that bidding
interest is established.
9(b):2
• Assist the City in receiving the bids, compute the accuracy of the bids received, and
recommend to the City the most favorable bid for award.
• Coordinate with bond counsel the preparation of required contracts and resolutions.
Post Sale Support
• Coordinate the bond issue closing including making all arrangements for bond printing,
registration, and delivery.
• Furnish to the City a complete transcript of the transaction.
* Assist, as requested by the City, with the investment of bond issue proceeds.
Investment Assistance:
Should the City desire to invest the proceeds from the Debt issuance or any other funds of the City
through NSI in its capacity as a broker, NSI shall, at all times, transact such investments as
principal.
COMPENSATION
For the proposed sale by the City of its approximate $200,000 General Obligation Equipment
Certificates of Indebtedness, Series 2010A, (the "Bonds "), NSI's fee shall be a lump sum of
$3,900.00. The fee due to NSI shall be payable by the City upon the closing of the Bonds.
NSI agrees to pay the following expenses from its fee:
• Out -of- pocket expenses such as travel, long distance phone, and copy costs.
• Production and distribution of material to rating agencies and/or bond insurance
companies.
• Preparation of the bond transcript.
The City agrees to pay for all other expenses related to the processing of the bond issue(s)
including, but not limited to, the following:
• Engineering and/or architectural fees.
• Publication of legal notices.
• Bond counsel and local attorney fees.
• Fees for various debt certificates.
• The cost of printing Official Statements, if any.
• City staff expenses.
• Airfare and lodging expenses of one NSI official and City officials when and if
traveling for rating agency presentations.
• Rating agency fees, if any.
• Bond insurance fees, if any.
• Accounting and other related fees.
It is expressly understood that there is no obligation on the part of the City under the terms of this
Agreement to issue the Bonds. If the Bonds are not issued, NSI agrees to pay its own expenses
and receive no fee for any services it has rendered.
9(b):3
SUCCESSORS OR ASSIGNS
The terms and provisions of this Agreement are binding upon and inure to the benefit of the City and NSI
and their successors or assigns.
TERM OF THIS AGREEMENT
This Agreement may be terminated by thirty (30) days written notice by either the City or NSI and it shall
terminate sixty (60) days following the closing date related to the issuance of the Bonds.
Dated this th day of March, 2010.
Northland Securities, Inc.
By:
Richard G. Asleson, Sr. Vice President
City of St. Joseph, Minnesota
By:
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