267001 WHITE - CITV CL RK CO1111C11 �� /���
PINK - FINANC GITY OF SAINT PAUL 1 � � ,
CANARV - DEPART ENT
BLU£ -MAYOR � Fll@ NO.
'� � � � C il Resolution
Presented By
Referr d To Committee: Date
Out of Committee By Date
WHEREAS, the City of Saint Paul has received an offer
fr Piper, Jaf�ray & Hopwood, Tnc, whereby the company would
pro ide certain professional services to aid the City of Saint
Pau in�4determining whether to issue refund bonds, including
the examination of certain outstanding City bonds, to determine
whe her it would be feasible to issue refunding bonds, and also.
pay all out-of-pocket costs of the City in relation to such
iss e; and
WHEREAS, the City Council' s Finance, Management and
Per onnel Committee has studied the matter and has recommended
tha the City Council authorize the company to study the City
of aint Paul outstanding bond isSUes and submit to the City
Cou cil for its consideration re�cc�nmendations concerning the
iss ance of refunding bonds, a t� such services to be rendered
at o cost and expense to the �ity; now, therefore, be it -
RESOLVED, that the Council of the City of Saint Paul docs
her by authorize the p�oper city off icers to approve the agreen!�ent
wit Piper, Jaffray &` Hopwood, Inc. , copy of which is attached '
her to, and that the City Council shall then consider the recom-
men ations to be made by the said ,c�npany for the purpose of
det rmining whether or not refunding bonds should. be issued, it
bei g understood that the City Council retains the authority to
det rmine at some future time whether or not refunding bonds
sho ld be issued.
COUN ILMEN Requested by Department of:
Yeas Nays
Christ nsen Office of the Cit Administrator
M�xa unt [n Favor
Levin
Rcedl U Against B
Sylves er
Tedes o
Presid nt 02Za
Adopted b uncil: Date �� � �� Form Approved b City ttor y
Cert' ed P by C e 4ary BY
Y
Approved ayor: D 8 7� Approved ay ou Cil
By BY
� �iPR i � i9'�� � '
� a•�;-=�►~�'`�.,� � _ \�a:��.t_
' ,,,�"^"'"'~�.��J. � -- _ ., . �i� i� ' _
, � �t'_:"z = ='1-61 ! i
� • .--± ��r.� . _
���
._ .j �
\' ^ 1
. _ � ��,�� rr�.�r�'�,n-�
� _- ,,, _ � �;�`'- � ,« / _ .��',,
- rt;.
�- _ - .- - , �
_ �.�
,,;: �j , ` Piper,Ja��raY&Hop�o►od
.. `,":' � 1 '1 1
, `��'-. __ - .� �•-�
, . �,-� u�coaro�rep
iia ch 24, 19 7 6 __ , �.,�r;��a9s.s[�m�f New Yak Sl4de�.�.
So crable 'laqor aad City Council
Ci q of St. Paul
Ci y Ha11
St Paul, �Lf.nnesota 55102
By means of eaabl3.ag legislation the Citq Couaci.l is e�gawered to
r und outstaadiag bands which, at the time of refnadiag, are no[
o erwise eligible for prior redemption. Suen a refundiag is
a complishsd through the purchase of U. S. Trease�ry aadfor Pederal
eney obligations, which are aan-ca11ab1e and which are placed ia
t t. These obligations are purchased from the pracee� of the
R fuadiag bond issue according to a pre-datermined �chedule ia
s ficieat amouats to pap the priacipal., iaterest, and aay call.
p emium oa the boads refuaded. •
I view of current IIarket conditions we believe that certain aut-`
s anding bond issues of the City may be refuaded effectiag sigaificaaC
d bt reduction to the City of St. Paul.
erefore we offer the fallowing proposal for your coasiderattoa and
a ceptance•
�e �aill make a detailed sturlg of your outstaadiag debt and the
funds availab2e ta pay such debt, and based on the study, prapare
alternative refunding proposals zaithin the limitations of enab3iag
Iegislation and Treasury Departaent ragulatian. 'I`Y:ese propasals
will be submitted at such time as is deeaed most ccnducive to ga3a
maximum savings for the Issuer.
We will closely monitor the muaicipal a:d federal, securities markets
to help insure a timely public sale of th� re£undino bonds. ;
. Structure the entire refunding issue to ensure as cZose as possible
the proper aafl desired placement of debt reductio�. �
. Ensure the preparatiort and dfstribution of a prvspzetus and public
notice of sale.
�. �Ja�.;�ate all. b�C� on behalf of t:!� r_-- �-_ -,a:ce �a::on:�er.d�*ion to
a�ca�_, �:Odir: o� =2jecC.
•��t. Paul, `•:in:zs::�a
. � ria ch 24, 19i6 ������
PaeTwo
6 Ensure evaluation of the City's financial situation and compile '
appropriate data for submissioa to Moody's Investor Service far
the purpase of receiving a neco bond rating.
7 Prepare debt service schedules of bonds refuaded and aaalysis of cash
flow of fedzral securities to en�ure full and complete defeasanc�.
. Submit the accepted bid, cash flow calculat3ons and a11 �elated
docu�eats to boad cauasei for the purpose of providing legal opiaioa,
no litigatioa certificate aad timely delivery af priated boads.
Rstain a firm of establish�d certified public accountants to varify
aad grovide certification to the effect that defeasance schedule is "
ia fact sufficieat to pay al�, debt service on boads refsm.ded.
1 . Establish co�•uaications wirh and su�ply appropri.ate documeats to the
trustee bank to esciow the fe�eral securities and ensure timelq pay-
. ments on bonds refunded.
1: Purclzase aad deliver the escrowed securities to the trustes for tha -
benefit of the City at yields sufficieat to defease boxtds refuaded
pursuaat to the regulations of the U. S. �reasury Departmeat. Such
escrowed Eederal securities will be sold by us to the City at the
time of bond clQSin4 for aa amount equal to:
Par proceeds of re£unding bonds plu� accrued interest on refuaded
bonds fxom their last interest payment dates to date of closing,
Plus, any preaium paid to the City for the Refuading Bonds,
Plus, any additional City funds which maq be used i£ determinsd �y
the City Couacil to be to the adv�ntage of the City.
� 12. We will pay a21 of the out-of-packet costs of the City related tp
�: this refunding including but not limited to:
A. Attorney's fees paid to Bond Counsel retained hy you
B. CP�, and Actuary fees
C. Bond ratino expense
D. Bor.d prinCing and shipping casts
E. Escrow Ban'_{ charges (Trustee)
F. Pav;r� �g2z� `ees
G. ..;:Ci. ..��_. � C:{'�u�:Ij.°..S � . . . . . . .
L, _ -1-,� rZc� - ;_% +��� �'OUi �.t��='� C�?..3!1�.�.3I1t5� iC 3�'- •
L-i. � �j�.,._�. ._...'.�'--` .. - -. . . - � � .
. .. .. . . . . � . . . I .
.. ' , �' �t. Paul, `tinnasota �����-�'�
farch 24, 1976
age Three
It is undersCOOd that Piper, Jaf�ray & Hopwood shall pay all such
incidental expenses whether or not the City ulti.mately approves the
delivery of refunding bonds in coznection with this offer.
13. The issuance of refunding bonds asstcaes our receipt and delivery of:
A. A no-litigation certif icaCe to the effect that thera is no
litigatioa or other proceeding pending or threateaed to
restrict or enjoia the issuaace, sale or delivery of the
~ refunding bonds ar any provisioas of the refuading bonds.
B, The legal opinion of nationally recognized municipal bond
attorneys appraviag the legality of the refunding boads aad
the validity of their issuance aad stating that interest
thareon is exempt fram federal income taxatioa under exist-
iag laws aad regulatians.
Ia return for these services aad this assistance you hereby accegt this
proposal by authorizing us to proceed with the refunding process and to
prepare appropriate documeats required for public sale.
In the event the evaluation of bids does not sufficientlq reduce the debt
service on the bonds refunded it is hereby understood that the City
reserves the right to reject all bids.
t
It is further uaderstood that this agreeaent will run for a period of 18
days from date of acceptance of this letter, whereby an acceptable atfer to
purchase refuading bonds must be received. If such an offer is nvt xeceived
the city retains the option to (1) cancel this agreemeat, (2) extead the time
period, or (3) negotiate a bid at private sale if consistent with bond
. counsel's approval.
Resgectfully submitted,
PIPER, JAFFRAY & �I0�4?QOD INCORP�R�TED
�
By
� �% ����--_------
This proposal is hereby accepted for and on behalf of the City of St. Paul,
riinnesota, pursuant to authorization by its governing body this day
of , 1976. "
By
Attest
----
�
. _
r .
\ aM ol: 1�l19T5
` 1 ,
EXPLANATION :OF ABMIN�STRATIVE ORDERS, � �� �_ �
RESOLUTIONS t AND ORTyINANCES �1:}�
� . � `
D�TE: M �ch 29', 1976
; . � ; :
�'O: YOR LAie1RENCE D. COH�1 ,
: FR: T OMAS J. KELLEY, CITY ADMINISTRATOR :
,
: RE: � �TANCE 'REFUNDIirTG PROPOSAL
IdTRACT BETWEEI� PTPER, JAFFRAY A�D HOPWOQD, INC. AND TFiE �� Y
' ; : ; I ��
, _ , _
:
, ACTION 4UESTED: . '
� To ente in�o contract with Piper, Jaff�ay and Hopwood, I�c. �
FURPOS AN1� RATIONALE FOR THTS ACTIQN: : ` , -
TE3 DE� IN� WHETHER TO SSSUE REFUND B�ND�, INCI,UDING '�HE EXAI��1'�A� ON
OF. CLR IiJ CIUTSTANDING:CTTY BONDS AND TO DETERMINE �'�'I�� IT: W4UL -.
BE FF� IBI.� T.O ISSUE REFUNDING B4NDS.
' A'['TAC S: . ,
Counci, Resolution '
Letter dat�d 3/24J76 from Piper, Jaffray, , Hopwaod, Inc.
APPROV I
Th a . Ke , i strator I .
f
I
,
:...
,�.
�_�:
. M-. � . . . . . . . . . . . ..i�i.
. A . , • Cl?Y• p !���/!'��. '(1 °� ` .��
� �� . � �. ���� ��_�i .
' � �� . � � � . � . . � ,
LL '.a �f. � � � . . . � .
p � r a "'3 '
� �s�uo�� i
N��
� �-'� �� C1TY OF SAINT PAUL
v•• _
OFFICE OF THE CI�TY ATTORNEY �
April 1, 1976 �
��� �'�,� �� ,
� � ���
k �,.� y J.EROME J SEGAL�:��,��
� ' iJ�?,."X . . "4 •���
. ` - 1 L..;� . . . . �
. . ( :` � T IY.S. ,1 � � ' � . - ' P�+. ,�nS+"
� 4�� tt / 4 . . . . . . \ . �.*�..
� � � ;Y v r:� ritbr _ 7� r . .. . . ... . �y{7g�
��j yw� � .� �`„a'�..
. . . �>.�i . }_�i - . .. � .,. »`�^aN
�.. .,,� t 5 . '
: �.w Thoaaas ,Re11eY .� . ��,:�,,�;,
, , .
�� � -.•< �x,Ci�y_:;Administrator �';�.�,�% �'��
S
h
�� � �� '�365.tiCity Hall � :, ,� , '� _ � R'�'1� `� `�
`s- �, 'y Building �h �} ..�s�,�� , �
,��,�n �, � , x -- 3� , , ,�
.
-. �.� - ..,,„���* � .. y c'"
-..A�,�-a��� . .:. , �:. . ., �5 ,v��;:. � � a, �
=����" Re.t,�8onds Refunding - � � ''���
• . _ .,>
��
� � _ ����Proposed °.Aqreement with Piper, Jaffray & Hopwood ,�
.,. ..
, .
: .. . �:� �
. . �-. . �.. . .
� � . ;Dear�Mr.Relley� ��
. \� . .:s �, 4 + 1 i.. �I. . � � . ... . . . . . . . . . ` .... . ,
• , _a'�. . .... . ..�� �" ,�,... :,.. � . ....
..4� .
� `The City Council Finance Committee at its meeting last week
;:�expressed its concern that any proposed issue of refunding
-bonds by the City of Saint Paul should not be issued in
, :.;suah: a manner : so as- to create a large .windfall profit to a��
' � =
�Athe-City''� �arketing agent. - You and your sta.f f have alsa - ;�
. x._. �
expres�ed this concern. �P,�
,,�A t�, . x �.,,
� �,k.�
z "sugge�t t�at the proposed agreement with Piper, Jaffray,
" & Hopwood contain the following provision so as to ensure
� tha:t�=;.the City will have the ability to prevent such an
extraordinarily large windfall profit. The following
la,nguage, if added to the agreement, would give the City
this protection. _
« ;
. . . : , , .� .. � . � � � . . . � �.. yf �
Add new parag=aph 14, . .
. . �.,:
In no event shall the City assume any obligation for any �
� fee or e.xpense v�hi.ch rnay he- incurred by Piper, Jaffray & � ;
Hopwood (PJFI) , . it being understood that PJH has not . t �
separately contracted with the City for the payment of its ^
fees and expenses in connection with the refunding and
that PJH will be comgensated in the event the City shall
elect to issue refunding bonds only if the City accepts
proposals of PJH and the refunding bonds are issued, and
only from the source and in the amount hereinafter �
, described� to-wit:
' City Hall, Saint Paul, Minne'sota 55102
�
�
�
�
; - 612'298-5121
.. - .
Thomas Kelley �� / ���
Page Two
April 1, 1976
The compensation of PJH will be derived fram the difference
("Required Profit") if any, between the price the City is
required to pag for the obligations to be deposited in the
escrow account, in order that the yield thereon shall be .s
limited as provided ._by appl3cable proposed arbitrage
regulations, as determined by City's bond counsel, and
the actual market price thereon; and the entire amount of
'� r Required Profit, if any� : shall be the sole compensation
,�,t,,
"` "` ' of PJH and the source to which it must look for reimbur�e-
�{�� . ment for any of its expenses, provided that the City may
require the purchase of special United States obligations
� so as to reduce such Required Profit to an amount determined
appropriate by the City.
If you concur in this recommendation, and the firm of PJH
- also concurs, the agreement can be retyped� so as to include
this phrase and will be consisterit with the actions taken
by the City Council' s Finance Committee and, I believe,
w`zll satisfy the concerns expressed by the Committee and
yourself. �
��,.: ,
., .� 3,f";rl h+•�.�� . . `.:�.'!'.- ,. . .. . . . , . . . .. . . .,
. . .. :i.. ... . . _ . . .,.. .. .. . . . . ' . . ...
Your very truly, �
`
JE ME .
Ci Atto ey
JJS:cg �