05-955Council File # �' �S
Crreen Sheet # 3�Z fr 33 j
RESOLUTION
Presented By
Referred To
Committee: Date:
Resolution Directing Finance Team to Structure City 2005 STAR Bonds
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3 WHEREAS, in 2005 the Minnesota Legislature modified the Sales Tax law to allow to for the
4 additional issuance of debt for strategic land assembly iniriatives; and
6 WHEREAS, resources are needed for the City/HRA to undertake mixed use projects throughout
7 the Saint Paul neighborhoods and downtown to improve the taac base; and
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WHEREAS, Springsted, the City Financial Advisor, in consultation with the Director of
Financial Services, the City Treasurer, and PED Resources has coordinated and reviewed the
September 2005 RFP which solicited a qualified Underwriter(s) to assist in the shucturing of
taxable subordinate 2005 STAR Bonds, and
WHEREAS, based upon the lowest cost fixed rate bond structure proposal, it is recommended
that the City's Office of Financial Services and PED Resources (the "Finance Team") works
with UBS Financial Service Inc. ("UBS")and RBC Dain Rauscher ("Dain"), as underwriter co-
managers to complete the issuance of the needed debt before the end of the year.
NOW THEREFORE BE IT RESOLVED, the City Council directs:
The Finance Team to work with Springsted, Briggs and Morgan and underwriters UBS and Dain
as co-managers for the issuance of these bonds.
The Finance Team to return by December 7, 2005 to the City Council for consideration of a new
taYable STAR TIF revenue bond issue of up to $25M (net proceeds) consistent with the Sales
Tas Law attached in Eachibit A.
The preparation of guidelines for the use of 2005 STAR Bond proceeds (to be initially deposited
in an Undesignated 2005 STAR Bonds Projects Account). The draft guidelines, which will be
prepared by PED, will have review and comment in November by the Neighborhood STAR
Board before considerarion by City Council.
OF SAINT PAUL, NIINNESOTA
l 7
OS- 9SS
Yeas Nays Absent
Benanav �/'
Bos4om �
Hazris f
Helgen ��
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Montgomery �
Thune i�
� � D�.r.�� �� ���orm Approved by City Attomey
Date
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Adoption Certified by CouncIl Secretary g !
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Adopted by CouncIl:
Requested by
Department of Planning and Economic Development
and Office of Financial Services
B c = =z k� ' L ��.!///��'Tit-!'/G4 �M•/��
AppLOVed by Financial Services
By: ���
By:
Approved by
By:
OS- 95S
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
, Depar6nenUoffice/council: i Datelnifiated:
; PE -P�� ��-� ; Green Sheet NO: 3028331
i Confact Person & Phone: f
Bob Geurs/Tadd Huriey '
266-6653 �
Must Be on CouncilAgenda by (Date): �
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' ContractType:
'� OT-0THER(DOESNTFfTANY
�; CATEGORY)
-' � UepalLnent Seni lo rerson Inloawaie
� 0 � lannine & Economic Develoo i Bob Genrs I
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Assign I 1 � lannin &EconomicDevelo IDirectodS.Kimberl
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Number Z '�(.ShAttornev ' pNAttomev
For �
Routing I 3 SYiavor's Offiee I Mavor ar Assistant
Order �� 4 ancd uncil
i 5 - lanoin & Economic Develo Bob Geurs
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� Total # of Signature Pages _(Clip All Locations for Signature)
Name Finance Team (including UBS and RBC Dain Rauscher) to shvcture 2005 City STAR Bonds. Retum to Council by end of
November for consideration to issue new debt.
rcecommenaanons: Hppro�e �A7 or tte7ect (K7:
Planning Commission
CB Committee
_ _ CiNI Senice Commission
rersona� service convacts mus� Answerme ronowmg ctueswns:
1. Has this persoNfirtn eeer waked under a contract for this department?
Yes No
2. Has this personlfirtn eeer been a city employee?
Yes No
3. Does this persoNfirtn possess a skill not rrortnally possessed by any
c�ment city employee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
2005 state law change allows for additional STAR debt for strategic land assembly initiative. Estimated amount is $25m (net).
Advantaqes NApprovetl:
Additional funds to undertake land assembly initiarive.
Disadvantaqes If Approved:
None, Imown.
Disadvantages If Not Approved:
Lost oppor[unity to increase tax base.
iotal Hfnount of
Transaction:
Funding Source:
Fiaancial lnformation:
(Explain)
CosURevenue Budgeted:
Activity Number:
October 5, 2005 1:32 PM Page 1
Robert Geurs - FINAL STAR bonding authority language.doc
�k � i �O �� � tt
(s�.� ��-�)
2005 Special Session Chapter 3, Article 5 Sections 26 and 27
Original Legisiarion: SF 1209 (Tax III Bill)
141.13
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141.15
141.16
141.17
141.18
141.19
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141.21
141.22
141.23
141.24
141.25
141.26
141.27
Sec. 26. Laws 1993, chapter 375, article 9, section 46,
subdivision 2, as amended by Laws 1997, chapter 231, article 7,
section 40, and Laws 1998, chapter 389, article 8, section 30,
and Laws 2003, First Special Session chapter 21, article 8,
section 13, is amended to read:
Subd. 2. [USE OF REVENLIES.] Revenues received from the tax
authorized by subdivision 1 may only be used by the city to pay
the cost of collecting the taY, and to pay for the following
projects or to secure or pay any principal, premium, or interest
on bonds issued in accordance with subdivision 3 for the
following projects.
(a) To pay all or a portion of the capital expenses of
construction, equipment and acquisition costs for the expansion
and remodeling of the St. Paul Civic Center complex, including
the demolition of the existing arena and the construction and
141.28 equipping of a new arena.
141.29 (b) Except as provided in para�raphs �l and (fl. the
141.30 remainder of the funds must be spent for:
141.31 (1) capital projects to further residential, cultural,
14132 commercial, and economic development in both downtown St. Paul
14133 and St. Paul neighborhoods; and
14134 (2) capital and operating expenses of cultural
141.35 organizations in the city, provided that the amount spent under
141.36 this clause must equal ten percent of the total amount spent
142.1 under this paragraph in any year.
142.2 (c) The amount apportioned under paragraph (b) shall be no
1423 less than 60 percent of the revenues derived from the tax each
142.4 year, except to the extent that a portion of that amount is
142.5 required to pay debt service on (1) bonds issued for the
142.6 purposes of paragraph (a) priar to March 1, 1998; or (2) bonds
142.7 issued for the purposes of paragraph (a) after March 1, 1998,
142.8 but only if the city council deternvnes that 40 percent of the
1429 revenues derived from the tax together with other revenues
142.10 pledged to the payment of the bonds, including the proceeds of
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Robert Geurs - FINAL STAR bonding authority language.doc
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142.11 defuutive bonds, is expected to exceed the annual debt service
142.12 on the bonds.
142.13 (d) If in any year more than 40 percent of the revenue
142.14 derived from the taY authorized by subdivision 1 is used to pay
142.15 debt service on the bonds issued for the purposes of paragraph
142.16 (a) and to fund a reserve far the bonds, the amount of the debt
142.17 service payment that exceeds 40 percent of the revenue must be
142.18 deternuned for that year. In any year when 40 percent of the
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143.1
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revenue produced by the sales tax exceeds the amount required to
pay debt service on the bonds and to fund a reserve far the
bonds under paragraph (a), the amount of the excess must be made
available for capital projects to further residential, cultural,
commercial, and economic development in the neighborhoods and
downtown until the cumulative amounts determined for all years
under the preceding sentence have been made available under this
sentence. The amount made available as reimbursement in the
preceding sentence is not included in the 60 percent deternnined
under paragraph (c).
(e) In each of calendar vears 2006. 2007, 2008, and 2009,
revenue not to exceed $3.500.000 may be used to pav the
principal of bonds issued for capital projects of the citv.
After December 31, 2009, revenue from the tax imposed under
subdivision 1 mav not be used far this putpose.
�f By January 15 of each � year, the mayor and
the city council must report to the legislature on the use of
sales tax revenues during the preceding �e-3�ea� one-vear period.
Sec. 27. Laws 1993, chapter 375, article 9, section 46,
subdivision 3, as amended by Laws 1998, chapter 389, article 8,
143.3 section 31, is amended to read:
143.4 Subd. 3. [BONDS.] The city may issue general obligation
143.5 bonds or special revenue bonds to finance all or a portion of
143.6 the cost for projects authorized in subdivision 2, paragraph (a)
143.7 or b. The debt represented by the bonds shall not be included
143.8 in computing any debt limitations applicable to the city. The
143.9 bonds may be paid from or secured by any funds available to the
143.10 city, including the taac authorized under subdivision 1, any
143.11 revenues derived from the project, tax increments from the tax
143.12 increment district that includes the project, and revenue from
143.13 any lodging taY imposed under Laws 1982, chapter 523, article
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Robert Geurs - FINAL STAR bonding authority language.doc
143.14 25, secrion 1. The bonds may be issued in one or more series
143.15 and sold without election on the quesrion of issuance of the
143.16 bonds or a properry tax to pay them. Except as otherwise
143.17 provided in this section, the bonds must be issued, soid, and
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secured in the manner provided in Minnesota Statutes, chapter
475. The aggregate principal amount of bonds issued under this
subdivision for proiects authorized in subdivision 2, paraQraroh
�, may not exceed $65 million, provided that the city may
issue additional bonds under this subdivision for �rojects
authorized in subdivision 2, para¢raph (al, as long as the total
principal amount of the additional bonds together with the
outstanding principal amount of the bonds previously issued
under this subdivision for proiects authorized in subdivision 2,
paraeraph (a), does not exceed $130 million. The bonds
authorized by this subdivision shall not be included in local
general obligation debt as defined in Laws 1971, chapter 773, as
amended, including Laws 1992, chapter 511, and shall not affect
the amount of capital improvement bonds authorized to be issued
by the city of St. Paul. Bonds to � for proiects authorized
in subdivision 2, para¢raqh (b), may be issued if the city
council first determines that 20 percent of the revenues derived
from the tax authorized under section 1 together with other
revenues pled e�d to �ayment of the bonds, including the proceeds
of definitive bonds. is expected to exceed the annual debt
service on the bonds.
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