274492 WMITE - C�TV CIERK � ^ y
PINK - FINANCE G I TY O F SA I NT PA U L Council ��(����
CANARV - DEPARTMENT File NO•
BLUE - MAVOR
Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS, by Resolution, C. F. No. 274397, adopted February 7,
1980, the Council authorized the issuance and sale of $4,000,000
General Obligation Water Pollution Abatement Bonds, Series 1980,
by advertisement and sealed bids to be received in the office of
the Director of Finance and Management Services, on Tuesday,
February 26, 1980; and
WHEREAS, the Director, Department of Finance and Management
Services, has advised the Council that no bid was received under
present applicable law limiting interest rate to 7� per annum,
and has requested authorization to readvertise, at such time as
change in law or decline in market interest rates makes this
course feasible.
RESOLVED by the Council of the City of Saint Paul, Minnesota,
that the Director of Finance and Management Services, is hereby
authorized to readvertise said bonds, at such time as he may
determine such action to be feasible.
COUNCILMEN
Requested by Department of:
Yeas M��N Nays �
Hozza In Favor
Hunt
Levine _ � __ Against BY
�ad�ex
Showalter
Tedesco ��g Z 6 � Form Ap r by City ttorne
Adopted ou il: Date — �
Cer ied Passe by ncil S�creta BY �
!
I�ppr y A�lavor: Da ��`Q � g ���(� Approved by Mayor for Submission to Council
By — By
�I�Sfi�D MAR 8 19C0
OFFICIAL STATEMENT '� � G
Rating: An application will be made to
�� �' / �.
IVloody's Investors Service, Inc. 8�
NEW ISSUES to $tandard 8� Poor's Corporotion
In the opinion of Bond Counsei, atl Bonds are exempt from taration by the State of
Minnesoia and its subdivisions and municipalities and the interest Lo be paid on said
Bonds is not includable in Lhe gross income of ihe recipient for United States or
State of Minnesota income tax purposes (other than Minnesota corporate franchise
taxes measured by income) according to present federai and Minnesota laws,
reguIatiorts, rulings and decisions.
CITY OF SAINT PAUL, MIMVESOTA
' $��,�
GEt�RAL OBLIGATION CAPITAL IMPROVEMEM BONDS, SERIES 1980
Bonds Dated: April I, 1980 Interesi Due: April I and October I
The Bonds shall mature April I as follows:
$475,000 1981 $625,000 1985 $750,000 1988
525,000 1982 650,000 1986 800,000 1989
550,000 1983 �700,000 1987 �850,000 1990
575,000 1984
The Bonds shall not be subjeci to payment in advance of their respective stated
maturity dates.
Bids shall be for not less than par and accrued interest on ihe total principal ,
amount of ihe Obligations. Bids must be accompanied by a certified or cashier's •
check in the amount of $65,000 payable to the order of the City of Saint Paul.
$a.�,�
GENERAL OBLIGATION WATER POLLUTION ABATEMENT BONDS, SERIES 1980
Bonds Dated: April I, 1980 Interest Due: April I and October I
The Bonds shall mature April I as follows:
$100,000 1981-82 $200,000 1991-92 $300,U00 1998
$125,000 1983-85 $225,000 1993-94 $325,000 1999
$150,000 1986-88 $250,000 1995 $350,000 2000
$175,000 1989-90 $275,000 1996-97
All F3onds maturing on or after April I, 1993 at the option of the Issuer will be
subject to redemption prior to maturity on April I, 1992 and any interest payment
date thereafter, at o price of par and accrued interest. For further information,
see the Official Notice of Offering page v.
Bids shall he for not less than par and accrued interest on the total principal
amount of the Obligations. Rids must be accompanied by a certified or cashier's
check in the amount of $40,000 payable to the order of the City of Saint Paul.
Both Issues:
The Bonds are offered for delivery subject to an approving legal opinion of Briggs
and Morgan Professional Association, Saint Paul and Minneapolis, Minnesota.
No bid will be considered which is contingent upon award of the other Issue.
Bid Openirg: February 26, 1980(Tuesday) at I I:00 A.M., Central Time
Award: February 26, 1980(Tuesday) at 12:00 Noon, Central Time
For more complete specifications relative to the obligations see the Official Notice
of Offering for each issue, pages ii thru vi herein.
The daTe of this Official Statement is February IS, 1980.
Further information may be obtained from SPRINGSTED Incorporated, Financial
Advisor to ihe Issuer, 800 Osborn Building, Saint Paul, Minnesota 55102, 612/222-
424 I.
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� CITY OF SAINT PAUL
4a.,``Tr °'� DEPARTMENT OF FINANCE AND MANAGEMENT SERVICES
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.,o ��- �� BERNARD J. CARLSON, DIRECTOR
113 City Hall, Saint Paul, Minnesota 55102
(612} 298-4637
GEORGE IATIMER
Mayor
February 25, 1980
The Honorable George Latimer
Mayor of the City of Saint Paul '
Joanne Showalter, President,
� and Members of the Council
of the City of Saint Paul
.j
{�
� We have a $10,500,000 General Obligation Bond Sale scheduled for tomorrow,
February 26, 1980. At the present time, we do not expect to receive any
bids on this bond sale, because of the current state .of the bond market and
a NLinnesota state law which places a ceiling of 7$ on interest for our bonds.
Just last week the State of Ohio sold AAA-rated General Obli3ation Bonds with a
term of approximately 10 years at a rate of 7.30$. This issue was sold at .3$
above the ceiling of 7$ for our AA-rated bonds. No one seems to foresee hope for
any substantial masket improvement. In line with inflation in other areas of the
economy, it appears a new floor has been established for tax-exempt rates.
Two bills now in the Minnesota Senate would raise or remove the 7$ ceiling. Senate
File 1910 would raise the rate limit to 10$, while Senate File 1911 would abolish
. any rate limit for bonds sold at public sale but would li.mit the ceiling to 10�
for negotiated issues. To the best of my knowledge, at present �there has not
. been a companion bill introduced in the House.
i
. , The timi.nq of this bond sale is critical for a number of factors. Four million
� dollars of the bond sale is Water Pollution Abatement Bonds, for continuing the
Thomas-Dale sewer construction. We opened two sewer construction bids on January
; 19 and 26 which gave us the amaunt of bonds we had to sell for this phase of the
sewer. We have only 90 days to award those bids, so if we are unable to award by
April 19 and 26, we will end up having to rebid at most probably substantially higher
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costs. The remaining part of the bond sale, the $6,500,000 CIB Bonds, would of
course delay all of those related projects and impede our ability to bid early
in the spring at relatively lower costs.
Assuming that we do not receive any bids as we expect, it is my intention to
submit two additional resolutions:
1) A resolution which would allow the Finance Director to proceed
with reoffering the bonds as soon as the market conditions
allow or the State law increasing or eliminating the interest rate
ceiling is changed.
2) A resolution indicating the City's support for a change by the
legislature in the State law setting the 7� ceiling.
,
If you would like any more information on this matter, please call.
Sincerely,
� �' �^
�i���� �
BERNARD J. , SON
Director o� Finance and
Management Services
BJC/ja
cc: Richard Broeker �
Peter Hames
Peg O'Keefe
Steve Wellington
Shelley Wright
Legislative Aides
Dept. Heads & Office Directors
James Hart
r i SPRINGSTED � -� � �. � �
�, � �INCORPORATED
; / PUBLIC FINANCE
I/ ADVISORS
MEMO
TO: Bernard J. Carlson, Director
Department of Finance and Management Services
City of Saint Paul
FROM: Osmon R. Springsted, Chairman
Springsted Incorporated
Financial Advisor to the City of Saint Paul
RE: Review of Tax-Exempt Market
DATED: February 26, 1980
Last Thursday the Bond Buyer Index, a national index of tax-exempt rates jumped
7 I basis points to 8.46% - both are records.
Seven syndicates submitted blank bid forms and/or good faith checks for the City's
offerings today. When called this morning each said they could not bid within the
7% limit. Citibank of New York advised us it was not even looking at 8% offerings.
The last sale in Minnesota was a $230,000 "A" rated City of Rosemount issue with
an average of 3.87 years. One bid was received at 6.99%. Since then offerings at
Chisholm, Morris, Champlin and Tracy have had no offers. On the 13th the Adrian
School District received no bids for its "A" rated general obligations.
Yesterday an "Aa" rated general obligation offering of King County, Washington
wi#h a final �aturity of 2009 did not receive an offer within an 8°�0 limit imposed
by the issuer. (The state has no statutory limit.)
A week ago the Salt Lake City School District received no offer for its "Aaa" rated
general obligation bonds for which the issuer had a 7% limit.
Last night the City of Brandon, Wisconsin received no offer for its revenue bonds
for which there was no rate limit.
On Thursday of last week the State of New York paid a net interest rate of 8.78%
for its general obligation bonds going out to 2010.
Next month the Minnesota communities of Golden Valley, Washington County,
Clarkfield, Red Wing, Big Lake, Glencoe and Wadena are scheduled to have
offerings. We do not foresee any of them being able to market their bonds within
the 7% limit. Neither do we see any evidence in the market or economy to support
optimism for improved market conditions in at least the near-term. At yesterday's
auction of 91-day Treasury Bills the average rate was 13.70% with a bond
equivalent yield of 14.43% which is 1.73% over the beginning of the year and .59%
over the level of the previous week.
800 Osborn Building, Saint Paul, Minnesota 55102 t612) 222-4241