HomeMy WebLinkAbout[04b] 2019A Bond Sale
Council Agenda Item 4b
MEETING DATE: August 5, 2019
AGENDA ITEM: 2019A Bond Sale – Tammy Omdal, Northland Securities, Inc.
SUBMITTED BY: Finance
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: None
PREVIOUS COUNCIL ACTION: Council awarded bids for the industrial park expansion and 2019
street improvements. Both projects followed the requirements to issue 429 assessment bonds.
BACKGROUND INFORMATION: Tammy Omdal, Northland Securities, will be present to discuss
the 2019A GO Improvement bond issue to construct the industrial park expansion north of the current
th
industrial park, and completion of the 2019 street improvements. The bonds will sell on August 19. To
get the best pricing and to expedite the sell before the next council meeting, staff recommends adopting a
Trigger Resolution for the maximum the bonds would be issued for. The bonds may be reduced by the
th
amount of prepaid assessments. The assessments may be prepaid by August 9.
Due to the size of the issue, a bond rating was recommended. The bonds were rated as AA- by S&P as
discussed with the debt management study. The favorable bond rating provides for a better interest rate in
the bond market.
Tammy will go through the financial plan with the bond sale. The financial plan provides a nice
summary of the bond issue.
BUDGET/FISCAL IMPACT: $4,720,000 General Obligation Improvement Bonds
ATTACHMENTS: Request for Council Action – 2019A GO Improvement Bond Sale
Resolution 2019-053 Approving the Issuance of GO Improvement Bonds, Series 2019A
Financial Plan
2019A GO Improvement Bonds Summary
REQUESTED COUNCIL ACTION: Authorize execution of the trigger Resolution 2019-053
approving the issuance of the GO Improvement Bonds, Series 2019A.
CERTIFICATION OF MINUTES
RELATING TO GENERAL OBLIGATION IMPROVEMENT BONDS,
SERIES 2019A
ISSUER: City of St. Joseph, Minnesota
BODY: City Council
KIND, DATE, TIME AND PLACE OF MEETING:
A regular meeting held on Monday, August 5, 2019 at 6:00 p.m., in the City Offices
MEMBERS PRESENT:
MEMBERS ABSENT:
Documents Attached: Extract of Minutes of said meeting.
RESOLUTION 2019-053 APPROVING THE ISSUANCE OF
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2019A
I, the undersigned, being the duly qualified and acting recording officer of the public corporation
issuing the obligations referred to in the title of this certificate, certify that the documents
attached hereto, as described above, have been carefully compared with the original records of
said corporation in my legal custody, from which they have been transcribed; that said
documents are a correct and complete transcript of the minutes of a meeting of the governing
body of said corporation, and correct and complete copies of all resolutions and other actions
taken and of all documents approved by the governing body at said meeting, so far as they relate
to said obligations; and that said meeting was duly held by the governing body at the time and
place and was attended throughout by the members indicated above, pursuant to call and notice
of such meeting given as required by law.
WITNESS MY HAND officially as such recording officer on August 5, 2019.
Interim City Administrator
EXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL OF THE CITY OF ST. JOSEPH, STATE OF MINNESOTA
HELD: Monday, August 5, 2019
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of St. Joseph, State of Minnesota, was duly held on Monday, August 5, 2019 at 6:00 p.m.
Member ___________________ introduced the following resolution and moved its
adoption:
RESOLUTION 2019-053 APPROVING THE ISSUANCE OF
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2019A
BE IT RESOLVED by the City Council of the City of St. Joseph, Minnesota (herein, the
“City”), as follows:
1. The City Council hereby finds and declares that it is necessary and expedient for the City
to sell and issue its fully registered general obligation improvement bonds in the total
aggregate principal amount not to exceed $4,700,000 (herein, the “Bonds”). The
proceeds of the Bonds will be used to finance the 2019 street improvements and the
industrial park improvement project and the costs of issuing the Bonds.
2. The City Council desires to proceed with the sale of the Bonds by direct negotiation with
Northland Securities, Inc. (herein, “NSI”). NSI will purchase the Bonds in an arm’s-
length commercial transaction with the City.
3. The Mayor and Interim Administrator are hereby authorized to approve the sale of the
Bonds in an aggregate principal amount not to exceed $4,700,000 and to execute a bond
purchase agreement for the purchase of the Bonds with NSI, provided the true interest
cost is less than 4.00%.
4. Upon approval of the sale of the Bonds by the Mayor and the Interim Administrator the
City Council will take action at its next regularly scheduled or special meeting thereafter
to adopt the necessary approving resolutions as prepared by the City's bond counsel.
5. NSI is authorized to prepare an Official Statement related to the sale of the Bonds.
6. If the Mayor and the Interim Administrator have not approved the sale of the bonds to
NSI and executed the related bond purchase agreement by December 31, 2019, this
resolution shall expire.
The motion for the adoption of the foregoing resolution was duly seconded by Member
__________________, and upon vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted by the St. Joseph City Council this 5th
day of August, 2019.
CITY OF ST. JOSEPH
By
Rick Schultz, Mayor
By
Therese Haffner, Interim City Administrator
Finance Plan
St. Joseph, Minnesota
$4,500,000
General Obligation Improvement Bonds,
Series 2019A
August 5, 2019
150 South 5th Street, Suite 3300
Minneapolis, MN 55402
612-851-5900 800-851-2920
www.northlandsecurities.com
Member FINRA and SIPC | Registered with SEC and MSRB
Contents
Executive Summary ...................................................................................................................................................1
Issue Overview ............................................................................................................................................................2
Purpose ................................................................................................................................................................ 2
Authority ............................................................................................................................................................. 2
Structure .............................................................................................................................................................. 2
Security and Source of Repayment ........................................................................................................ 3
Plan Rationale ................................................................................................................................................... 3
Issuing Process ................................................................................................................................................. 3
Attachment 1 – Preliminary Debt Service Schedule ......................................................................................4
..........................................................................................................7
Attachment 2 – Estimated Levy Schedule
Attachment 3 – Related Considerations.............................................................................................................8
Not Bank Qualified ................................................................................................................................ 8
Arbitrage Compliance ........................................................................................................................... 8
Continuing Disclosure .......................................................................................................................... 8
Premiums .................................................................................................................................................... 9
Rating ............................................................................................................................................................ 9
Attachment 4 – Calendar of Events ...................................................................................................................10
Attachment 5 - Risk Factors..................................................................................................................................11
Northland Securities, Inc. Page 2
Executive Summary
The following is a summary of the recommended terms for the issuance of $4,720,000 General
Obligation Improvement Bonds, Series 2019A (the “Bonds”). Additional information on the
proposed finance plan and issuing process can be found after the Executive Summary, in the Issue
Overview and Attachment 3 – Related Considerations.
Purpose Proceeds from the Bonds will be used to finance the 2019 street
improvements within the City and the industrial park
improvement project and to pay costs associated with the
issuance of the Bonds.
Security
The Bonds will be a general obligation of the City. The Citywill
pledge special assessments collected from benefitted properties
and property tax levies for payment of the Bonds.
Repayment Term
The Bonds will mature annually each December 15 in the years
2020through 2029. Interest on the Bonds will be payable on
June 15, 2020 and semiannually thereafter on each June 15 and
December 15.
Estimated Interest Rate Average coupon:2.03%
True interest cost (TIC): 2.26%
Prepayment Option Bonds maturing on and after December 15, 2028 will be subject
to redemption on December 15, 2027 and any day thereafter at
a price of par plus accrued interest.
Rating A rating will be requested from Standard and Poor’s (S&P). The
City’s general obligation debt is currently rated "AA-" by S&P.
Tax Status The Bonds will be tax-exempt, non-bank qualified obligations.
Risk Factors
There are certain risks associated with all debt. Risk factors
related to the Bonds are discussed in Attachment 5.
Type of Bond Sale
Negotiated Sale
Estimated Pricing Day Monday, August 19, 2019
Council Consideration
Monday, August 19, 2019
Northland Securities, Inc. Page 1
Issue Overview
Purpose
Proceeds from the Bonds will be used to finance the 2019 street improvements (the “2019 Street
Improvements Portion”) and the industrial park improvement project (the “Industrial Park
Improvement Portion”) and to pay costs associated with the issuance of the Bonds. The 2019
Street Improvements Portion includes the following projects:
th
4 Avenue Northeast and Southeast
Townsite
Pond View Ridge
Jade Road
Hallow Park
Elm Street West
The Bonds have been sized based on estimates provided by City staff. The table below contains
the sources and uses of funds for the bond issue.
Industrial
Park
2019 Street Improvement Issue
ImprovemetsProjectSummary
Sources Of Funds
Par Amount of Bonds$2,035,000.00$2,465,000.00$4,500,000.00
Total Sources $2,035,000.00$2,465,000.00$4,500,000.00
Uses Of Funds
Deposit to Project Construction Fund1,994,350.002,415,000.004,409,350.00
Total Underwriter's Discount (1.250%)25,437.5030,812.5056,250.00
Costs of Issuance13,559.8916,425.1129,985.00
Rounding Amount1,652.612,762.394,415.00
Total Uses $2,035,000.00$2,465,000.00$4,500,000.00
Authority
The Bonds will be issued pursuant to the authority of Minnesota Statutes, Chapters 429 and 475.
Under Chapter 429, an Improvement means any type of improvement made under authority
granted by section 429.021, which includes, but is not limited to, improvements to streets and
sidewalks, storm and sanitary sewer systems, and street lighting systems.
Before issuing bonds under Chapter 429, the City must hold a public hearing on the
improvements and the proposed bonds and must then pass a resolution ordering the
improvements by at least a 4/5 majority. A public hearing was held on February 4, 2019 for the
2019 Street Improvements Portion and on March 18, 2019 for the Industrial Park Improvement
Portion and resolutions ordering the improvements were adopted with a 4/5 majority at each
respective meeting.
Structure
The Bonds have been structured to result in relatively equal annual principal payments over 10
years. The special assessments have also been structured to result in equal annual principal
payments.
Northland Securities, Inc. Page 2
The proposed structure for the bond issue and preliminary debt service projections are illustrated
in Attachment 1 and the estimated levy is illustrated in Attachment 2.
Security and Source of Repayment
The Bonds will be a general obligation of the City. The finance plan relies on the following
assumptions for the revenues used to pay debt service, as provided by City staff:
Special Assessments. The City is expected to levy special assessments against benefited
properties in the amount of $981,660.81 for the 2019 Street Improvement Portion and
$2,415,000 for the Industrial Park Improvements Portion. The assessments will be payable
over 10 years, with an interest rate of 4.50% as provided by the City and structured for
level annual payments of principal. The Plan assumes that the assessments will be levied
in 2019 for initial payment in 2020.
The City anticipates receiving pre-paid assessments on the 2019 Street Improvements
Portion prior to the Bonds being sold. The City will provide the amount of pre-paid
assessments that have been received to Northland by August 9, 2019 and that amount shall
be applied to the construction fund to reduce the Bond size.
Property Taxes. The remaining revenues needed to pay debt service on the Bonds are
expected to come from property tax levies. The initial projections show an annual tax levy
is needed to produce the statutory requirement of 105% of debt service, after accounting
for assessments. The levy may be adjusted annually based on actual special assessment
collections and additional monies in the debt service fund. The initial tax levy will be made
in 2019 for taxes payable in 2020.
Plan Rationale
The Finance Plan recommended in this report is based on a variety of factors and information
provided by the City related to the financed project and City objectives, Northland’s knowledge
of the City and our experience in working with similar cities and projects. The issuance of General
Obligation Improvement Bonds provides the best means of achieving the City’s objectives and
cost effective financing. The City has successfully issued and managed this type of debt for
previous projects.
Issuing Process
The City has engaged Northland to act as underwriter for the Bonds pursuant to federal securities
regulations. Northland will purchase the Bonds in an “arm’s length” negotiated sale. The
calendar of events for the issuing process can be found in Attachment 4.
In authorizing the issuance, the City Council will adopt a trigger (parameters) resolution. The
resolution authorizes the Mayor and the Finance Director to execute a bond purchase agreement
when the True Interest Cost is less than a percentage set by the Council. The bond purchase
agreement will be ratified by the City Council at its next meeting. This approach gives the City
greater flexibility in selling the Bonds when market conditions produce the desired results, rather
than accepting the conditions that exist on a specific Council meeting date.
Underwriter: Northland Securities, Inc., Minneapolis, Minnesota
Bond Counsel: Briggs and Morgan, P.A., Minneapolis, Minnesota
Paying Agent: Northland Trust Services, Inc. Minneapolis, Minnesota
Northland Securities, Inc. Page 3
Attachment 1 – Preliminary Debt Service Schedules
Combined 2019A
DatePrincipalCouponInterestTotal P+IFiscal Total
09/12/2019-----
06/15/2020--65,112.4065,112.40-
12/15/2020455,000.001.600%42,931.25497,931.25563,043.65
06/15/2021--39,291.2539,291.25-
12/15/2021455,000.001.650%39,291.25494,291.25533,582.50
06/15/2022--35,537.5035,537.50-
12/15/2022455,000.001.700%35,537.50490,537.50526,075.00
06/15/2023--31,670.0031,670.00-
12/15/2023450,000.001.750%31,670.00481,670.00513,340.00
06/15/2024--27,732.5027,732.50-
12/15/2024450,000.001.800%27,732.50477,732.50505,465.00
06/15/2025--23,682.5023,682.50-
12/15/2025450,000.001.900%23,682.50473,682.50497,365.00
06/15/2026--19,407.5019,407.50-
12/15/2026450,000.002.000%19,407.50469,407.50488,815.00
06/15/2027--14,907.5014,907.50-
12/15/2027445,000.002.100%14,907.50459,907.50474,815.00
06/15/2028--10,235.0010,235.00-
12/15/2028445,000.002.250%10,235.00455,235.00465,470.00
06/15/2029--5,228.755,228.75-
12/15/2029445,000.002.350%5,228.75450,228.75455,457.50
Total$4,500,000.00-$523,428.65$5,023,428.65-
Date And Term Structure
Dated9/12/2019
Delivery Date9/12/2019
First available call date12/15/2027
Call Price100.000%
Yield Statistics
Bond Year Dollars$25,807.50
Average Life5.735 Years
Average Coupon2.0282036%
Net Interest Cost (NIC)2.2461635%
True Interest Cost (TIC)2.2582616%
All Inclusive Cost (AIC)2.3860058%
*Based on estimated non-bank qualified rates as of July 19, 2019 plus 0.25%.
Northland Securities, Inc. Page 4
2019 Street Improvements Portion
DatePrincipalCouponInterestTotal P+IFiscal Total
09/12/2019-----
06/15/2020--29,438.5029,438.50-
12/15/2020205,000.001.600%19,410.00224,410.00253,848.50
06/15/2021--17,770.0017,770.00-
12/15/2021205,000.001.650%17,770.00222,770.00240,540.00
06/15/2022--16,078.7516,078.75-
12/15/2022205,000.001.700%16,078.75221,078.75237,157.50
06/15/2023--14,336.2514,336.25-
12/15/2023205,000.001.750%14,336.25219,336.25233,672.50
06/15/2024--12,542.5012,542.50-
12/15/2024205,000.001.800%12,542.50217,542.50230,085.00
06/15/2025--10,697.5010,697.50-
12/15/2025205,000.001.900%10,697.50215,697.50226,395.00
06/15/2026--8,750.008,750.00-
12/15/2026205,000.002.000%8,750.00213,750.00222,500.00
06/15/2027--6,700.006,700.00-
12/15/2027200,000.002.100%6,700.00206,700.00213,400.00
06/15/2028--4,600.004,600.00-
12/15/2028200,000.002.250%4,600.00204,600.00209,200.00
06/15/2029--2,350.002,350.00-
12/15/2029200,000.002.350%2,350.00202,350.00204,700.00
Total$2,035,000.00-$236,498.50$2,271,498.50-
Date And Term Structure
Dated9/12/2019
Delivery Date9/12/2019
First available call date12/15/2027
Call Price100.000%
Yield Statistics
Bond Year Dollars$11,665.71
Average Life5.733 Years
Average Coupon2.0272965%
Net Interest Cost (NIC)2.2453502%
True Interest Cost (TIC)2.2574466%
All Inclusive Cost (AIC)2.3852309%
Northland Securities, Inc. Page 5
Industrial Park Improvement Portion
DatePrincipalCouponInterestTotal P+IFiscal Total
09/12/2019-----
06/15/2020--35,673.9035,673.90-
12/15/2020250,000.001.600%23,521.25273,521.25309,195.15
06/15/2021--21,521.2521,521.25-
12/15/2021250,000.001.650%21,521.25271,521.25293,042.50
06/15/2022--19,458.7519,458.75-
12/15/2022250,000.001.700%19,458.75269,458.75288,917.50
06/15/2023--17,333.7517,333.75-
12/15/2023245,000.001.750%17,333.75262,333.75279,667.50
06/15/2024--15,190.0015,190.00-
12/15/2024245,000.001.800%15,190.00260,190.00275,380.00
06/15/2025--12,985.0012,985.00-
12/15/2025245,000.001.900%12,985.00257,985.00270,970.00
06/15/2026--10,657.5010,657.50-
12/15/2026245,000.002.000%10,657.50255,657.50266,315.00
06/15/2027--8,207.508,207.50-
12/15/2027245,000.002.100%8,207.50253,207.50261,415.00
06/15/2028--5,635.005,635.00-
12/15/2028245,000.002.250%5,635.00250,635.00256,270.00
06/15/2029--2,878.752,878.75-
12/15/2029245,000.002.350%2,878.75247,878.75250,757.50
Total$2,465,000.00-$286,930.15$2,751,930.15-
Date And Term Structure
Dated9/12/2019
Delivery Date9/12/2019
First available call date12/15/2027
Call Price100.000%
Yield Statistics
Bond Year Dollars$14,141.79
Average Life5.737 Years
Average Coupon2.0289519%
Net Interest Cost (NIC)2.2468345%
True Interest Cost (TIC)2.2589340%
All Inclusive Cost (AIC)2.3866451%
Northland Securities, Inc. Page 6
Attachment 2 – Estimated Levy Schedules
2019 Street Improvements Portion
Less: Special
Assessment Collection
DateTotal P+I105% LevyRevenues*Net LevyLevy YearYear
12/15/2019----
12/15/2020253,848.50266,540.93144,304.15122,236.7820192020
12/15/2021240,540.00252,567.00137,923.34114,643.6620202021
12/15/2022237,157.50249,015.38133,505.86115,509.5220212022
12/15/2023233,672.50245,356.13129,088.40116,267.7320222023
12/15/2024230,085.00241,589.25124,670.92116,918.3320232024
12/15/2025226,395.00237,714.75120,253.44117,461.3120242025
12/15/2026222,500.00233,625.00115,835.98117,789.0220252026
12/15/2027213,400.00224,070.00111,418.50112,651.5020262027
12/15/2028209,200.00219,660.00107,001.02112,658.9820272028
12/15/2029204,700.00214,935.00102,583.56112,351.4420282029
Total$2,271,498.50$2,385,073.43$1,226,585.17$1,158,488.26
*Special assessment revenue is based on assessments totaling $981,660.81 spread in equal principal payments
over 10 years and assessesd at a rate of 4.50% (as provided by the City).
Industrial Park Improvement Portion
Less: Special
Assessment Collection
DateTotal P+I105% LevyRevenue*Net Levy**Levy YearYear
12/15/2019----
12/15/2020309,195.15324,654.91355,005.00-20192020
12/15/2021293,042.50307,694.63339,307.50-20202021
12/15/2022288,917.50303,363.38328,440.00-20212022
12/15/2023279,667.50293,650.88317,572.50-20222023
12/15/2024275,380.00289,149.00306,705.00-20232024
12/15/2025270,970.00284,518.50295,837.50-20242025
12/15/2026266,315.00279,630.75284,970.00-20252026
12/15/2027261,415.00274,485.75274,102.50383.2520262027
12/15/2028256,270.00269,083.50263,235.005,848.5020272028
12/15/2029250,757.50263,295.38252,367.5010,927.8820282029
Total$2,751,930.15$2,889,526.66$3,017,542.50$17,159.63
*Special assessment revenue is based on assessments totaling $2,415,000 spread in equal principal payments
over 10 years and assessed at a rate of 4.50% (as provided by the City).
**The City may act to cancel the Net Levy on an annual basis if cash within the debt service fund from prior
year special assessment revenues, combined with current year special assessment revenues is sufficient to
cover 105% of debt service. Based on the estimated special assessment revenue the Net Levy in future years
will be cancelled.
Northland Securities, Inc. Page 7
Attachment 3 – Related Considerations
Not Bank Qualified
The City will be a “conduit” issuer of a tax-exempt financing for Country Manor St. Joseph, LLC
(sole member of which is The Foundation for Health Care Continuums). That financing, when
combined with the City’s Series 2019A Bonds, will exceed the $10 million “bank qualification”
limit for the City pursuant to Federal Tax Law. Non-Bank-qualified bonds typically receive
interest rates slightly higher than bank-qualified bonds.
The loan agreement to be signed by Country Manor St. Joseph, LLC will contain a provision
providing for a fee to be paid to the City equal to the difference in interest cost between the non-
bank qualified rates the City receives on pricing day and the bank-qualified rates the City would
have received had the City retained its bank-qualified status.
Arbitrage Compliance
Project/Construction Fund. All tax-exempt bond issues are subject to federal rebate requirements
which require all arbitrage earned to be rebated to the U.S. Treasury. A rebate exemption the
City expects to qualify for is the “small issuer exemption.”
Debt Service Fund. The City must maintain a bona fide debt service fund for the Bonds or be
subject to yield restriction in the debt service fund. A bona fide debt service fund involves an
equal matching of revenues to debt service expense with a balance forward permitted equal to
the greater of the investment earnings in the fund during that year or 1/12 of the debt service of
that year.
The City should become familiar with the various Arbitrage Compliance requirements for this
bond issue. The Resolution for the Bonds prepared by Bond Counsel explains the requirements
in greater detail.
Continuing Disclosure
Type: Full
Dissemination Agent: Northland Securities
The requirements for continuing disclosure are governed by SEC Rule 15c2-12. The primary
requirements of Rule 15c2-12 actually fall on underwriters. The Rule sets forth due diligence
needed prior to the underwriter’s purchase of municipal securities. Part of this requirement is
obtaining commitment from the issuer to provide continuing disclosure. The document
describing the continuing disclosure commitments (the “Undertaking”) is contained in the
Official Statement that will be prepared to offer the Bonds to investors.
The City has more than $10,000,000 of outstanding debt and is required to undertake “full”
continuing disclosure. Full disclosure requires annual posting of the audit and a separate
continuing disclosure report, as well as the reporting of certain “material events.” Material events
set forth in the Rule, including, but not limited to, bond rating changes, call notices, and issuance
of “financial obligations” (such as USDA loans, Public Finance Authority loans and lease
agreements) must be reported within ten days of occurrence. The report contains annual financial
information and operating data that “mirrors” material information presented in the Official
Statement. The specific contents of the annual report will be described in the Undertaking that
appears in the appendix of the Official Statement. Northland currently serves as dissemination
agent for the City, assisting with the annual reporting. The information for the Bonds will be
incorporated into the reporting.
Northland Securities, Inc. Page 8
Premiums
In the current market environment, it is likely that the proposed pricing will include premiums.
A premium price occurs when the underwriter pays the City an amount in excess of the par
amount of a maturity in exchange for a higher coupon (interest rate). The use of premiums reflects
the underwriter’s view on future market conditions, tax considerations for investors and other
factors. Ultimately, the true interest cost calculation (“TIC”) will indicate the overall cost to the
City, regardless of premium.
A premium price produces additional funds that can be used in several ways:
The premium means that the City needs less bond proceeds and can reduce the size of the
issue by the amount of the premium.
The premium can be deposited in the Construction Fund and used to pay additional
project costs, rather than used to reduce the size of the issue.
The premium can be deposited in the Debt Service Fund and used to pay principal and
interest.
Northland will work with City staff prior to the day of pricing to determine use of premium (if
any).
Rating
A rating will be requested from Standard and Poor’s (S&P). The City’s general obligation debt is
currently rated "AA-" by S&P. The rating process will include a conference call with the rating
analyst. Northland will assist City staff in preparing for and conducting the rating call.
Northland Securities, Inc. Page 9
Attachment 4 – Calendar of Events
The following checklist of items denotes each milestone activity as well as the members of the
finance team who will have the responsibility to complete it. Please note this proposed timetable
assumes regularly scheduled City Council meetings.
June 2019July 2019
SunMonTueWedThuFriSatSunMonTueWedThuFriSat
1 1 2 3 4 5 6
2 3 4 5 6 7 8 7 8 9 10 11 12 13
9 10 11 12 13 14 15 14 15 16 17 18 19 20
16 17 18 19 20 21 22 21 22 23 24 25 26 27
23 24 25 26 27 28 29 28 29 30 31
30
August 2019September 2019
SunMonTueWedThuFriSatSunMonTueWedThuFriSat
1 2 3 1 2 3 4 5 6 7
4 5 6 7 8 9 10 8 9 10 11 12 13 14
11 12 13 14 15 16 17 15 16 17 18 19 20 21
18 19 20 21 22 23 24 22 23 24 25 26 27 28
25 26 27 28 29 30 31 29 30
DateAction Responsible Party
July 1 Preliminary Official Statement Sent to Rating Agency and to City Northland
for Sign Off
Finance Plan sent to City
Debt Plan sent to City
Week of July 8 Rating Call (City requested the rating call to be held this week, noting Northland, City,
the rating call will be held prior to the Council approving the issuance) Rating Agency
Week of July 22 Rating Received Northland, City,
Rating Agency
August 5Review Finance PlanNorthland, City
Council Action
Review Debt Plan
Council adopts Resolution approving the issuance of the Bonds
(“Trigger” Resolution)
August 7City provides amount of pre-paid assessments to NorthlandCity Staff
August 12 Awarding Resolution sent to City Northland, Bond
Counsel
August 19 Pricing Date Northland, City
Council Action
Bond Purchase Contract Signed and Awarding Resolution
adopted – 6:00 p.m.
(Tammy Omdal will not be attending the City Council meeting)
September 12 Closing on the Bonds (Proceeds Available) Northland, City
Staff, Bond Counsel
Northland Securities, Inc. Page 10
Attachment 5 - Risk Factors
Property Taxes: Property tax levies shown in this Finance Plan are based on projected debt service
and other revenues. Final levies will be set based on the results of sale. Levies should be reviewed
annually and adjusted as needed. The debt service levy must be included in the preliminary levy
for annual Truth in Taxation hearings. Future Legislative changes in the property tax system,
including the imposition of levy limits and changes in calculation of property values, would affect
plans for payment of debt service. Delinquent payment of property taxes would reduce revenues
available to pay debt service.
Special Assessments: Special assessments for the financed projects have not been levied at this
time. This Finance Plan is based on the assumptions listed earlier in this report. Changes in the
terms and timing for the actual assessments will alter the projected flow of funds for payment of
debt service on the Bonds. Also, special assessments may be prepaid. It is likely that the income
earned on the investment of prepaid assessments will be less than the interest paid if the
assessments remained outstanding. Delinquencies in assessment collections would reduce
revenues needed to pay debt service. The collection of deferred assessments, if any, have not been
included in the revenue projections. Projected assessment income should be reviewed annually
and adjusted as needed.
General: In addition to the risks described above, there are certain general risks associated with
the issuance of bonds. These risks include, but are not limited to:
Failure to comply with covenants in bond resolution.
Failure to comply with Undertaking for continuing disclosure.
Failure to comply with IRS regulations, including regulations related to use of the proceeds
and arbitrage/rebate. The IRS regulations govern the ability of the City to issue its bonds as
tax-exempt securities and failure to comply with the IRS regulations may lead to loss of tax-
exemption.
Northland Securities, Inc. Page 11
City of St. Joseph, Minnesota
$4,500,000 General Obligation Improvement Bonds, Series 2019A
Preliminary "AA-" Non-BQ Rates as of 7/22/19 plus 0.25%
Table of Contents
Report
ISSUE SUMMARY
Total Issue Sources And Uses1
Debt Service Schedule2
2019 STREET IMPROVEMETS
Debt Service Schedule3
105% Levy4
INDUSTRIAL PARK IMPROVEMENT PROJECT
Debt Service Schedule5
105% Levy6
2019A GO Bonds USING | Issue Summary | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Public Finance
City of St. Joseph, Minnesota
$4,500,000 General Obligation Improvement Bonds, Series 2019A
Preliminary "AA-" Non-BQ Rates as of 7/22/19 plus 0.25%
Total Issue Sources And Uses
Dated 09/12/2019 | Delivered 09/12/2019
Industrial Park
2019 Street Improvement
ImprovemetsProjectIssue Summary
Sources Of Funds
Par Amount of Bonds$2,035,000.00$2,465,000.00$4,500,000.00
Total Sources $2,035,000.00$2,465,000.00$4,500,000.00
Uses Of Funds
Deposit to Project Construction Fund1,994,350.002,415,000.004,409,350.00
Total Underwriter's Discount (1.250%)25,437.5030,812.5056,250.00
Costs of Issuance13,559.8916,425.1129,985.00
Rounding Amount1,652.612,762.394,415.00
Total Uses $2,035,000.00$2,465,000.00$4,500,000.00
2019A GO Bonds USING | Issue Summary | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Page 1
Public Finance
City of St. Joseph, Minnesota
$4,500,000 General Obligation Improvement Bonds, Series 2019A
Preliminary "AA-" Non-BQ Rates as of 7/22/19 plus 0.25%
Debt Service Schedule
DatePrincipalCouponInterestTotal P+IFiscal Total
09/12/2019-----
06/15/2020--65,112.4065,112.40-
12/15/2020455,000.001.600%42,931.25497,931.25563,043.65
06/15/2021--39,291.2539,291.25-
12/15/2021455,000.001.650%39,291.25494,291.25533,582.50
06/15/2022--35,537.5035,537.50-
12/15/2022455,000.001.700%35,537.50490,537.50526,075.00
06/15/2023--31,670.0031,670.00-
12/15/2023450,000.001.750%31,670.00481,670.00513,340.00
06/15/2024--27,732.5027,732.50-
12/15/2024450,000.001.800%27,732.50477,732.50505,465.00
06/15/2025--23,682.5023,682.50-
12/15/2025450,000.001.900%23,682.50473,682.50497,365.00
06/15/2026--19,407.5019,407.50-
12/15/2026450,000.002.000%19,407.50469,407.50488,815.00
06/15/2027--14,907.5014,907.50-
12/15/2027445,000.002.100%14,907.50459,907.50474,815.00
06/15/2028--10,235.0010,235.00-
12/15/2028445,000.002.250%10,235.00455,235.00465,470.00
06/15/2029--5,228.755,228.75-
12/15/2029445,000.002.350%5,228.75450,228.75455,457.50
Total$4,500,000.00-$523,428.65$5,023,428.65-
Date And Term Structure
Dated9/12/2019
Delivery Date9/12/2019
First available call date12/15/2027
Call Price100.000%
Yield Statistics
Bond Year Dollars$25,807.50
Average Life5.735 Years
Average Coupon2.0282036%
Net Interest Cost (NIC)2.2461635%
True Interest Cost (TIC)2.2582616%
All Inclusive Cost (AIC)2.3860058%
IRS Form 8038
Net Interest Cost (NIC)2.2461635%
Weighted Average Maturity5.735 Years
Bond Yield for Arbitrage Purposes2.0218021%
2019A GO Bonds USING | Issue Summary | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Page 2
Public Finance
City of St. Joseph, Minnesota
$2,035,000 General Obligation Improvement Bonds, Series 2019A
2019 Street Improvements
Debt Service Schedule
DatePrincipalCouponInterestTotal P+IFiscal Total
09/12/2019-----
06/15/2020--29,438.5029,438.50-
12/15/2020205,000.001.600%19,410.00224,410.00253,848.50
06/15/2021--17,770.0017,770.00-
12/15/2021205,000.001.650%17,770.00222,770.00240,540.00
06/15/2022--16,078.7516,078.75-
12/15/2022205,000.001.700%16,078.75221,078.75237,157.50
06/15/2023--14,336.2514,336.25-
12/15/2023205,000.001.750%14,336.25219,336.25233,672.50
06/15/2024--12,542.5012,542.50-
12/15/2024205,000.001.800%12,542.50217,542.50230,085.00
06/15/2025--10,697.5010,697.50-
12/15/2025205,000.001.900%10,697.50215,697.50226,395.00
06/15/2026--8,750.008,750.00-
12/15/2026205,000.002.000%8,750.00213,750.00222,500.00
06/15/2027--6,700.006,700.00-
12/15/2027200,000.002.100%6,700.00206,700.00213,400.00
06/15/2028--4,600.004,600.00-
12/15/2028200,000.002.250%4,600.00204,600.00209,200.00
06/15/2029--2,350.002,350.00-
12/15/2029200,000.002.350%2,350.00202,350.00204,700.00
Total$2,035,000.00-$236,498.50$2,271,498.50-
Date And Term Structure
Dated9/12/2019
Delivery Date9/12/2019
First available call date12/15/2027
Call Price100.000%
Yield Statistics
Bond Year Dollars$11,665.71
Average Life5.733 Years
Average Coupon2.0272965%
Net Interest Cost (NIC)2.2453502%
True Interest Cost (TIC)2.2574466%
All Inclusive Cost (AIC)2.3852309%
IRS Form 8038
Net Interest Cost (NIC)2.2453502%
Weighted Average Maturity5.733 Years
Bond Yield for Arbitrage Purposes2.0218021%
2019A GO Bonds USING | 2019 Street Improvemets | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Page 3
Public Finance
City of St. Joseph, Minnesota
$2,035,000 General Obligation Improvement Bonds, Series 2019A
2019 Street Improvements
105% Levy
Less: Special
Assessment
Collection
Revenues*Year
DateTotal P+I105% LevyNet LevyLevy Year
12/15/2019----
12/15/2020253,848.50266,540.93144,304.15122,236.7820192020
12/15/2021240,540.00252,567.00137,923.34114,643.6620202021
12/15/2022237,157.50249,015.38133,505.86115,509.5220212022
12/15/2023233,672.50245,356.13129,088.40116,267.7320222023
12/15/2024230,085.00241,589.25124,670.92116,918.3320232024
12/15/2025226,395.00237,714.75120,253.44117,461.3120242025
12/15/2026222,500.00233,625.00115,835.98117,789.0220252026
12/15/2027213,400.00224,070.00111,418.50112,651.5020262027
12/15/2028209,200.00219,660.00107,001.02112,658.9820272028
12/15/2029204,700.00214,935.00102,583.56112,351.4420282029
Total$2,271,498.50$2,385,073.43$1,226,585.17$1,158,488.26
*Special assessment revenue is based on assessments totaling $981,660.81 spread in equal principal payments over
10 years and assessesd at a rate of 4.50% (as provided by the City).
2019A GO Bonds USING | 2019 Street Improvemets | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Public Finance Page 4
City of St. Joseph, Minnesota
$2,465,000 General Obligation Improvement Bonds, Series 2019A
Industrial Park Improvement Project
Debt Service Schedule
DatePrincipalCouponInterestTotal P+IFiscal Total
09/12/2019-----
06/15/2020--35,673.9035,673.90-
12/15/2020250,000.001.600%23,521.25273,521.25309,195.15
06/15/2021--21,521.2521,521.25-
12/15/2021250,000.001.650%21,521.25271,521.25293,042.50
06/15/2022--19,458.7519,458.75-
12/15/2022250,000.001.700%19,458.75269,458.75288,917.50
06/15/2023--17,333.7517,333.75-
12/15/2023245,000.001.750%17,333.75262,333.75279,667.50
06/15/2024--15,190.0015,190.00-
12/15/2024245,000.001.800%15,190.00260,190.00275,380.00
06/15/2025--12,985.0012,985.00-
12/15/2025245,000.001.900%12,985.00257,985.00270,970.00
06/15/2026--10,657.5010,657.50-
12/15/2026245,000.002.000%10,657.50255,657.50266,315.00
06/15/2027--8,207.508,207.50-
12/15/2027245,000.002.100%8,207.50253,207.50261,415.00
06/15/2028--5,635.005,635.00-
12/15/2028245,000.002.250%5,635.00250,635.00256,270.00
06/15/2029--2,878.752,878.75-
12/15/2029245,000.002.350%2,878.75247,878.75250,757.50
Total$2,465,000.00-$286,930.15$2,751,930.15-
Date And Term Structure
Dated9/12/2019
Delivery Date9/12/2019
First available call date12/15/2027
Call Price100.000%
Yield Statistics
Bond Year Dollars$14,141.79
Average Life5.737 Years
Average Coupon2.0289519%
Net Interest Cost (NIC)2.2468345%
True Interest Cost (TIC)2.2589340%
All Inclusive Cost (AIC)2.3866451%
IRS Form 8038
Net Interest Cost (NIC)2.2468345%
Weighted Average Maturity5.737 Years
Bond Yield for Arbitrage Purposes2.0218021%
2019A GO Bonds USING | Industrial Park Improveme | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Page 5
Public Finance
City of St. Joseph, Minnesota
$2,465,000 General Obligation Improvement Bonds, Series 2019A
Industrial Park Improvement Project
105% Levy
Less: Special
Assessment Collection
DateTotal P+I105% LevyRevenue*Net Levy**Levy YearYear
12/15/2019----
12/15/2020309,195.15324,654.91355,005.00-20192020
12/15/2021293,042.50307,694.63339,307.50-20202021
12/15/2022288,917.50303,363.38328,440.00-20212022
12/15/2023279,667.50293,650.88317,572.50-20222023
12/15/2024275,380.00289,149.00306,705.00-20232024
12/15/2025270,970.00284,518.50295,837.50-20242025
12/15/2026266,315.00279,630.75284,970.00-20252026
12/15/2027261,415.00274,485.75274,102.50383.2520262027
12/15/2028256,270.00269,083.50263,235.005,848.5020272028
12/15/2029250,757.50263,295.38252,367.5010,927.8820282029
.
Total$2,751,930.15$2,889,526.66$3,017,542.50$17,159.63
*Special assessment revenue is based on assessments totaling $2,415,000 spread in equal principal payments over
10 years and assessed at a rate of 4.50% (as provided by the City).
**The City may act to cancel the Net Levy on an annual basis if cash within the debt service fund from prior year
special assessment revenues, combined with current year special assessment revenues is sufficient to cover 105% of
debt service. Based on the estimated special assessment revenue the Net Levy in future years will be cancelled.
2019A GO Bonds USING | Industrial Park Improveme | 7/22/2019 | 3:34 PM
Northland Securities, Inc.
Page 6
Public Finance