09-1012Substitute 9/16/09
Council File # 09-1012
Green Sheet # 3079056
AWARDING THE SALE OF GENERAL OBLIGATION TAX
INCREMENT REFUNDING BONDS, SERIES 2009G, AND TAXABLE
GENERAL OBLIGAITON TAX INCREMENT REFUNDING BONDS,
SERIES 2009H; FIXING THE FORM AND TERMS OF THE BONDS
AND DIRECTING THEIR EXECUTION AND DELIVERY; AND
PLEDGING TAX INCREMENTS AND CERTAIN PARKING REVENUES
FOR THE PAYMENT THEREOF
1 WHEREAS, the City Council of the City of Saint Paui, Minnesota (the "City") has heretofore
2 deternuned that it was necessary and expedient to provide money to establish a redevelopment project in
3 the City (the "ProjecP') located within the area of the City bounded by Wabasha and 5t. Peter Streets and
4 Fifth and Sixth 5treets (`Block 39"); and
5 WHEREAS, the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the
6 "HRA") established the Block 39 Renewal and Renovation Tas Increment Financing District, being a tax
7 increment financing district established as a renewal and renovation district under Minnesota Statutes,
8 Section 469.174 to 469.179, as amended (the "Tax Increment AcY') pursuant to the Tax Increment Act
9 and a resolution adopted by the HRA on May 28, 1997, and approved by the City on May 28, 1997; and
1� WHEREAS, the HRA converted the Block 39 Renewal and Renovation Tax Increment Financing
11 District to the Block 39/Arena Redevelopment Tax Increment Financing District (the `Block 39 Tas
12 Increment DistricY' or the "DistricP') being a redevelopment district as defined in Section 469.174,
13 subdivision 10, of the Tax Increment Act, and a resdution adopted by the HRA on September 24, 1997,
14 and approved by the City on September 24, 1997, ta7c increment revenues from which (the "Tas
15 Increments") were pledged to the payment of the Prior Bonds (as defined herein) and aze pledged to the
16 Bonds (as defined herein); and
17 WHEREAS, the HRA established its Seventh Place Redevelopment Project as from time to time
18 amended, and has by HRA resolution adopted September 24, 1997, expanded the boundaries of the
19 Project which expansion was approved by the City on September 24, 1997, afrer consideration by the
20 Saint Paul Planning Commission as required by law; and
21 WHEREAS, on Januazy 22, 1998, the City issued its General Obligation Tvc Increment Bonds
22 (Block 39 Project), Series 1998A (the "Series 1998A Bonds), and Taxable General Obligation Tax
23 Increment Bonds (Block 39 Project), Series 1998B (the "Series 1998B Bonds" and, together with the
24 Series 1998A Bonds, the "Prior Bonds"); and
25 WI�REAS, the proceeds from the Prior Bonds were provided to the HRA to be applied to
26 finance: (i) the acquisition by the HRA of Block 39 located within the District; (ii) the demolition of the
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA ��
09-1012
27 existing structures on Block 39; (iii} site prepazation on Block 39; (iv) the construction of a 1,075-space
28 pazking facility on the eastern two-thuds of Block 39 (the "Parldng Facility"); and (v) the constmction of
29 approximately 12,000 square feet of retail space in the Parking Facility on Wabasha Street (the "Retail
30 Facility"); and
31 WHEREAS, the City wishes to refund and prepay the Prior Bonds by issuing its General
32 Obligation Taac Increment Refunding Bonds, Series 2009G (the "Series 2009G Bonds or "Tas Exempt
33 Bonds"), and its Tarable General Obligation Tax Increment Refunding Bonds, Series 2009H (the
34 "Series 2009H Bonds" or "I'asable Bonds" and, together with the Tax Exempt Bonds, the `Bonds"); and
35 WHEREAS, the HRA enteted into a Piedge Agreement, dated as of January 1, 1998, pledging the
36 Tas Increments and the revenues derived from the Pazking Facility to the Prior Bonds; and
37 WHEREAS, the HRA has approved the execution and delivery of an Amended and Restated
38 Pledge Agreement, to be dated on or after October 1, 2009 (the "Pledge AgreemenP'), between the HRA
39 and the City, pledging the Tax Increments and the parking revenues derived from the Parking Facility net
40 of the expenses of operation and maintenance of the Pazking Facility including deposits to a repair and
41 replacement fund (the "Net Parking Revenues") to the Bonds;
42 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul, Minnesota, as
43 follows:
44 1. Sale of Bonds. The City is proposing to issue and sell, pursuant to the provisions of the
45 Tax Increment Act and Minnesota Statutes, Chapter 475, as amended (the "Municipal Debt AcP'), the
46 Series 2009G Bonds in the original aggregate principal amount of $20,695,000, and the Series 2009H
47 Bonds in the original aggregate principal amount of $8,655,000. The proceeds derived from the sale of
48 the Bonds are to be applied to the redemption and prepayment of the Prior Bonds. The City has retained
49 Springsted Incorporated, Saint Paul, Minnesota, as its financial advisor in connection with issuance of the
50 Bonds. Pursuant to Minnesota Statutes, Section 475.60, subdivision 2(9), the Issuer has deternuned, with
51 the concunence of its financial advisor, to sell such bonds by limited public sale.
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2. Awazd of the Tas Exempt Bonds. The proposal of BMO Capital Markets (the "Ta�c
Exempt Bonds Purchaser") to purchase the Series 2009G Bonds described in the Terms of Proposal
incorporated into the Officiat Statement, dated August 24, 2009 (the "Official StatemenY'), is hereby
found and detemdned to be the most favorable offer received and a reasonable offer and is hereby
accepted, the proposal being to purchase the Tax Exempt Bonds at a price of $21,347,021.75 (the
principal amount of the Bonds of $20,695,000, plus an original issue premium in the amount of
$786,604.25, less the Tas Exempt Bonds Purchaser's discount of $134,582.50), for Tax Exempt Bonds
bearing interest as follows:
Maturity Date
(February 1)
2015
2016
2017
2018
2019
2020
Interest
Rate
4.000%
4.000
4.000
4.000
3.000
3.125
Maturity Date
(Februazy 1)
2021
2022
2023
2024
2025
Interest
Rate
3.125°k
3.500
3.500
3.500
3.500
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60 The amount of Tax Exempt Bonds authorized to be issued is the purchase price referenced above, ali of
61 wtrich will be applied to the refunding of the Series 1998A Bonds and the payment of the costs of issuing
62 the Tax Exempt Bonds. Interest on the Series 2009G Bonds will be payable semiannually on February 1
63 and August 1 in each yeaz, commencing Febrnary 1, 2�10, calculatecl on the basis of a 360-day yeaz of
64 twelve 30day months. The interest on the Series 2009G Bonds is payabie to the registered owners of
65 record thereof as of the close of business on the fifteenth (15th) day of the immediately preceding month,
66 whether or not such day is a business day.
67 3. Award of the Taxable Bonds. The proposal of Northland Securities, Ina (the "Tasable
68 Bonds Purchaser") to purchase the Series 2009H Bonds descabed in the Terms of Proposal incorporated
69 into the Official Statement is hereby found and determined to be the most favorable offer received and a
70 reasonable offer and is hereby accepted,the proposal being to purchase the Taxable Bonds at a price of
71 $8,794,562.95 (the principal amount of the Bonds of $8,655,000, plus an original issue premium in the
72 amount of $157,651.90, less the Taxable Bonds Purchaser's discount of $18,088.95), for Tasable Bonds
73 bearing interest as follows:
Maturity Date
(February 1)
2010
2011
2012
Interest
Rate
3.10%
3.10
3.10
Maturity Date
(February i)
2013
2014
2015
Interest
Rate
3.10%
3.10
3.10
74 The amount of Tasable Bonds authorized to be issued is the purchase price referenced above, all of which
75 will be applied to the refunding of the Series 1998B Bonds and the payment of the costs of issuing the
76 Taxable Bonds. Interest on the Sedes 2�09H Bonds will be payable semiannually on February 1 and
77 August 1 in each yeaz, commencing Februazy 1, 201Q calculated on the basis of a 360-day yeaz of twelve
78 30-day months. The interest on the Series 2009H Bonds is payable to the registered owners of record
79 thereof as of the close of business on the fifteenth (15th) day of the immediately preceding month,
80 whether or not such day is a business day.
81 4. Oriainal Issue Date: Denominations; Maturities. The Tax Exempt Bonds and the Taxable
82 Bonds shall be issued on a parity of lien, shall be dated October 19, 2009, as the date of original issue,
83 and shall be issued forthwith on or afrer such date as fully registered bonds. Each series of Bonds shall be
84 numbered from R-1 upwazd and shall be in the denomination of $5,000 each or in any integral multiple
85 thereof. The Taac Exempt Bonds shall mature on Febmary 1 in the years and amounts as follows:
Mariu Date
(Febrnary 1)
2015
2016
2017
2018
2019
2020
Principal
Amount
$ 820,000
$1,725,000
$1,80Q000
$1,850,000
$1,855,000
$1,920,000
Maturity Date
(February 1)
2021
2022
2023
2024
2025
Principal
Amount
$1,985,000
$2,055,000
$2,125,000
$2,225,000
$2,335,000
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86 The Taxable Bonds shall mature on February 1 in the years and amounts as follows:
Maturity Date
(Februazy 1)
2010
2011
2012
87
88
89
90
91
92
93
94
95
96
Principal
Amount
$ 1,295,000
$ 1,575,000
$ 1,605,000
Mahuity Date
(February 1)
2013
2014
2015
Principal
Amount
$ 1,640,000
$ 1,710,000
$ 830,000
5. Re¢istraz. 'I`he City Treasurer is hereby appointed as the initial bond registrar and paying
agent (the "Registraz" and the "Paying AgenY') for the Bonds. The City Treasurer shall serve as Registrar
unless and until a successor Registraz is duly appointed. A successor Registraz shall be an officer of the
City or a bank or trust company eligible for designation as Registraz pursuant to the Municipal Debt Act
and may be appointed pursuant to any contract the City and such successor Registraz shall execute which
is consistent herewith. The Registraz shall also serve as Paying Agent unless and until a successor Paying
Agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holder or
holders of the Bonds (the "Holder" or "Holders") in the manner set forth in the forms of the Bonds. The
effect of registration and the rights and duties of the City and the Registrar with respect thereto aze as
foilows:
97 (a) Register. The Registrar shall keep a bond register in which the Registraz provides for the
98 registration of ownership of the Bonds and the registration of transfers and exchanges of the Bonds
99 entitled to be registered, transferred, or exchanged.
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(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered
owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar,
dnly executed by the registered owner thereof or by an attomey duly authorized by the registered owner
in writing, the Registraz shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by
the transferor. The Registraz may, however, close the books for registration of any transfer after the
Fifteenth day of the month preceding each interest payment date and until that interest payment date.
107 (c) Exchange of Bonds. When Bonds are sunendered by the registered owner for exchange,
108 the Registraz shall authenticate and deliver one or more new Bonds of a like aggregate principal amount
109 and mahuity as requested by the registered owner or the owner's attorney in writing.
110 (d) Cancellation. Bonds surrendered upon transfer or exchange shall be prompdy cancelled
111 by the Registraz and thereafter disposed of as directed by the City.
112 (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registraz for
113 transfer, the Registraz may refizse to uansfer the Bond mmtil the Registraz is satisfied that the endorsement
114 on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is
I15 legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers
116 which it, in its judgment, deems improper or unauthorized.
117 (� Persons Deemed Owners. The City and the Registrar may treat the person in whose
118 name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is
119 overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on
120 the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's
121 order shall be valid and effectual to satisfy and dischazge the liability upon the Bond to the extent of the
122 sum or sums so paid.
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123 (g) Taxes, Fees, and Charges. The Registrar may impose a charge upon the owner thereof
124 for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee, or other
125 govemmental chazge required to be paid with respect to the transfer or exchange.
126 (h) Mutilated, I.ost, Stolen or Destroyed Bond. If a Bond becomes mutilated or is destroyed,
127 stolen, or lost, the Registraz shall deliver a new Bond of like amount, number, maturity date, and tenor in
128 exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution
129 for any Bond destroyed, stolen, or lost, upon the payment of the reasonable expenses and charges of the
130 Registraz in connection therewith; and, in the case of a Bond destroyed, stolen, or lost, upon filing with
131 the Regisuaz of evidence satisfactory to it that the Bond was destroyed, stolen, or lost, and of the
132 ownership thereof, and upon fumishing to the Registrar an appropriate bond or indemnity in Form,
133 substance, and amount satisfactory to it and as provided by law, in which both the City and the Regisuar
134 must be named as obligees. Bonds so surrendered to the Registraz shall be cancelled by the Registrar and
135 evidence of such cancellation shall be given to the City. If the mutiiated, destroyed, stolen, or lost Bond
136 has already matured or been called for redemption in accordance with its terms, it is not necessary to issue
137 a new Bond prior to payment.
138 6. Registration and Pa�ment. The Bonds will be issued only in fully registered form. The
139 interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or
140 draft issued by the Regisuar described herein. Each Bond shall be dated as of the last interest payment
141 date preceding the date of authentication to which interest on the Bonds has been paid or made available
142 for payment, unless: (i) the date of authentication is an interest payment date to which interest has been
143 paid or made available for payment, in which case the Bonds will be dated as of the date of
144 authentication; or (ii) the date of authentication is prior to the first interest payment date, in which case
145 the Bonds will be dated as of the date of original issue. The Tax Exempt Bonds shall bear interest at the
146 rates per annum as set forth in pazagraph 2 hereof and the Tasable Bonds shall beaz interest at the rates
147 per annum as set forth in pazagraph 3 hereof.
148 7. Redemntion.
149 (a) Optional Rederreption. The City may elect on February 1, 2018, and on any day
150 thereafter, to prepay Tax Exempt Bonds due on or afrer February 1, 2019. Optional redemptions may be
151 in whole or in part and if in part at the option of the City and in such manner as the City shall deternune.
152 If less than all Tax Exempt Bonds of a maturity aze called for redemption, the City will notify DTC (as
153 defined herein) of the particular amount of such maturity to be prepaid. DTC will deternune by lot the
154 amount of each participanYs interest in such maturity to be redeemed and each participant will then select
155 by lot the beneficial ownership interests in such maturity to be redeemed. All optional redemptions of the
156 Tas Exempt Bonds shall be at a price of par plus accrued interest to the redemption date. The Taxable
157 Bonds aze not subject to optional redemption prior to their respective stated maturity dates.
158 (b) Maadatory Redemption. Any maturity of the Tax Exempt Bonds may be subject to
159 mandatory redemption at a redemption price equal to one hundred percent (100%) of the principal amount
160 of Tas Exempt Bonds so redeemed plus accrued interest to the date of redemption, on February 1 in the
161 years and in the principal amounts as set forth below:
162 Any maturity of the Taxable Bonds may be subject to mandatory redemption at a redemption
163 price equal to one hundred percent (100%) of the principal amount of Taxable Bonds so redeemed plus
164 accrued interest to the date of redemption, on Febmary 1 in the yeazs and in the principal amounts as set
165 forth below:
09-1012
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]68
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]72
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(c) Selecrion of Bonds to be Redeemed: Kedemprion Procedure. In the event any of the
Bonds aze called for redemption, notice thereof identifying the Bonds to be redeemed shall be given by
the Registraz by mailing a copy of the redemption notice by first class mail (postage prepaid) to the
registered owner of each Bonds to be redeemed at the address shown on the registration books kept by the
Regisuaz and by publishing the notice if required by law. Failure to give notice by publication or by mail
to any registered owner, or any defect therein, shaIl not affect the validity of the proceedings for the
redemption of Bonds. Bonds so called for redemption shall cease To bear interest afrer the specified
redemption date, provided that the funds for the redempuon aze on deposit with the Registraz at that time.
174 (d) Notice of Redemption. The Registrar shall call Tax Exempt Bonds for optional
175 redemption and prepayment as herein provided upon receipt by the Registrar at least forty-five (45) days
176 prior to the redemption date of a request of the City, in written form if the Registrar is other than a City
177 officer. Such request shall specify the series and principal amount of Tas Exempt Bonds to be called for
178 redemption and the redemption date.
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Mailed notice of optional redemption shall be given to the Paying Agent (if otk�er than a City
officer) and to each affected Holder. If and when the City shall call any of the Tas Exempt Bonds for
redemption and prepayment prior to the stated maturity thereof, the Registraz shall give written notice in
the name of the City of its intention to redeem and pay such Tax Exempt Bonds at the office of the
Regisuar. Notice of redemption shall be given by First class mail, postage prepaid, mailed not less than
thirty (30) days prior to the redemption date, to each Holder of Bonds to be redeemed, at the address
appearing in the Bond Register. All notices of optional cedemption shall state: (i) the redemprion daYe;
(ii) the redemption price; (izi) if less than all outstanding Tax Exempt Bonds are to be redeemed, the
identification (and, in the case of partial redemption, the respecrive principal amounts) of the Tax Exempt
Bonds to be redeemed; (iv) that on the optional redemption date, the redemption price will become due
and payable upon each such Tax Exempt Bond, and that interest thereon shall cease to accrue from and
after said date; and (v) the place where such Tax Exempt Bonds a� to be surrendered for payment of the
redemption price (which shall be the office of the Registraz).
192 Notices to DTC or its nominee shall concain the CUSIP numbers of the Bonds. If there are any
193 Holders of the Bonds other than DTC or its nominee, the Regstrar shall use its best efforts to deliver any
194 such notice to DTC on the business day next preceding the date of mailing of such notice to all other
195 Holders.
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8. Forms of Bands. All of the provisions of the Bonds, when executed as authorized herein,
shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim
herein and shall be in full force and effect from the date of execution and delivery thereof. The Tax
Exempt Bonds shall be substantially in the form attached to this Resolution as EXHIBIT A(Tax Exempt
Bonds) and the Tasable Bonds shall be substantially in the form attached to this Resolurion as
EXHIBIT B(Taxable Bonds), which forms are hereby approved, with such necessazy and appropriate
variauons, omissions, and insertions (including changes to the aggregate principal amount of each series
of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds, the terms of redemption
of the Bonds, and variation from City policies regazding methods of offering general obligation bonds) as
the City Treasurer and Director, Office of Financial Services, or their respective deputies, itt their
discretion, shall determine and delivery of the Bonds by the C�ty shall be conclusive evidence of such
determinations.
208 The City Treasurer is authorized and directed to obtain a copy of the proposed approving legal
209 opinion of Kennedy & Graven, Chartere.d, Saint Paul, Minnesota, which ahall be complete excepY as to
210 daeing thereof and cause the opinion to accompany each Bond.
09-1012
211 9. Execution. The Bonds shall be executed on behalf of the City by the signature of its
212 Mayor, Clerk, and Director, Office of Financial Services, each with the effect noted on the forms of the
213 Bonds, and be sealed with the seal of the City; provided, however, that the seal of the City may be a
214 printed or photocopied facsunile; and provided further that any of such sia atures may be printed or
215 photocopied facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the
216 event of disability or resignation or other absence of any such officer, the Bonds may be signed by the
217 manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In
218 case any such officer whose signature or facsimile of whose signature shall appear on the Bonds shall
219 cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be
220 valid and sufficient for all purposes, the same as if he or she had remained in office until delivery.
221 10. Authentication; Date of Reeistration. No Bond shall be valid or obligatory for any
222 purpose or be entitled to any security or benefit under this resolution unless a Certificate of
223 Authentication on such Bond, substantially in the form set forth in EXHIBTT A and in EXHIBTT B, shall
224 have been duly executed by an authorized representative of the Registraz. Certificates of Authentication
225 on different Bonds need not be signed by the same person. The Registraz shall authenticate the signahxres
226 of of£icers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by
227 inserting as the date of registration in the space provided the date on which the Bond is authenticated. For
228 purposes of delivering the original Tas Exempt Bonds to the Tas Exempt Bonds Purchaser, the Registraz
229 shall insert as the date of registration the date of original issue. For purposes of delivering the original
230 Taxable Bonds to the Tasable Bonds Purchaser, the Registrar shall insert as the date of registration the
231 date of original issue. The Certificate of Authentication so executed on each Bond shall be conclusive
232 evidence that it has been authenticated and delivered under this resolution.
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1 L Holders; Treatment of Re¢istered Owner; Consent of Holders.
(a) Benefzciad Owners. For the putposes of all actions, consents, and other matters affecting
Holders of the Bonds, other than payments, redemptions, and purchases, the City may (but shall not be
obligated to) treat as the Holder of a Bond the beneficial owner of the Bond instead of the person in
whose name the Bond is registered. For that purpose, the City may ascertain the idenrity of the beneficial
owner of the Bond by such means as the Registraz, in its sole discretion, deems appropriate, including but
not limited to a certificate from the person in whose name the Bond is registeced identifying such
beneficial owner.
241 (b) Registered Owners. The City and Registrar may treat the person in whose name any
242 Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and
243 premium, if any, and interest on such Bond and for all other purposes whatsoever whether or not such
244 Bond shall be overdue, and neither the City nor the Registrar shall be affected by notice to the contrary.
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(c) Actions of Holders. Any consent, request, direction, approval, objection, or other
instmment to be signed and executed by the Holders may be in any number of concurrent writings of
similar tenor and must be signed or executed by such Holders in person or by agent appointed in writing.
Proof of the execution of any such consent, request, direction, approval, objection, or other instrument, or
of the wripng appointing any such agent and of the ownership of Bonds, if made in the following manner,
sha11 be sufficient for any of the purposes of this xesolution, and shatl be conclusive in favor of the City
with regard to any action taken by it under such request or other instrument, namely: (i) the fact and date
of the execution by any person of any such writing may be proved by the certificate of any officer in any
jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person
signing such writing acknowledged before him the execution thereof, or by an af£idavit of any witness to
such execution; and (ii) subject to the provisions of subparagraph (a) above, the fact of the ownership by
o9-ioia
256 any person of Bonds and the amounts and numbers of such Bonds, and the date of the holding of the
257 same, may be proved by reference to the bond register.
258 12. Book-Entrv Svstem.
259 (a) The Depository Trust Company. The Bonds will be initially issued in the form of a
260 sepazate single typewritten or printed fully registered Bond for each of the maturities of the Series 2009G
261 Bonds and for each of the maturities of the Series 2009H Bonds. Upon initial issuance, the ownership of
262 each Bond wi11 be registered in the regsuation books kept by the Registraz in the name of Cede & Co., as
263 nominee for The Depository Trust Company, New York, New York, and its successors and assigns
264 ("DTC"). Except as provided in this Section 12, all of the outstanding Bonds will be registered in the
265 registration books kept by the Registraz in the name of Cede & Co., as nominee oF DTC.
266 (b) Participants. With respect to Bonds registered in the registration books kept by the
267 Registraz in the name of Cede & Co., as nominee of DTC, the City, the Registrar, and the Paying Agent
268 will have no responsibility or obligation to any broker dealers, banks, and other financial institutions from
269 time to time for which DTC holds Bonds as securities depository ("Participants") or to any other person
270 on behalf of which a Participant holds an interest in the Bonds, including but not limited to any
271 responsibility or obligation with respect to: (i) the accuracy of the records of Cede & Co., DTC, or any
272 Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any
273 other person (other than a registered owner of Bonds, as shown by the registration books kept by the
274 Registrar), of any notice with respect to the Bonds, including any notice of redemption; or (iii) the
275 payment to any Participant or any other person, other than a registered owner of Bonds, of any amount
276 with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar, and the
277 Paying Agent may treat and consider the person in whose name each Bond is registered in the registration
278 books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of
279 principal, premium, and interest with respect to such Bond, for the purpose of registering transfers with
280 respect to such Bonds, and For all other purposes. The Paying Agent shall pay all principal of, premium,
281 if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in
282 the registration books kept by the Registrar, and all such payments will be valid and effectual to fully
283 satisfy and dischazge the City's obligations with respect to payment of principal of, premium, iF any, or
284 interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of
285 a Bond, as shown in the registration books kept by the Registraz, will receive a certificated Bond
286 evidencing the obligation of this Resolution. Upon delivery by DTC to the City Clerk of a written notice
287 to the effect that DTC has deternvned to substitute a new nominee in place of Cede & Co., the words
2S8 "Cede & Co." shall refer to such new nominee of DTC; and upou receipt of such a notice, the City Clerk
289 shall promptly deliver a copy of the same to the Registraz and Paying Agent.
290 (c) Representation Letter. The City has heretofore executed and delivered to DTC a Blanket
291 Issuer Letter of Representations (the "Representation L.etter") which shall govern payment of principal of,
292 premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or
293 Registraz subsequently appointed by the City with respect to the Bonds shall agree to take all actions
294 necessary for all representations of the City in the Representation Letter with respect to the Registrar and
295 Paying Agent, respectively, to be complied with at all times.
296 (d) Transfers Outside Book-Entry System. In the event the City, by resolution of the City
297 Council, deternunes that it is in the best interests of the persons having beneficial interests in the Bonds
298 that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the
299 Participants, of the availability through DTC of Bond certificates. In such event the City will issue,
300 transfer, and exchange Bond certificates as requested by DTC and any other registered owners in
301 accordance with the provisions of this Resolution. DTC may deternune to discontinue providing its
09-1012
302 services with respect to the Bonds at any time by giving notice to the City and discharging its
303 responsibilities with respect thereto under applicable law. In such event, if no successor securities
304 depository is appointed, the City shall issue and the Registraz shall authenticate Bond certificates in
305 accordance with this Resolution and the provisions hereof shall apply to the transfer, exchange, and
306 method of payment thereof.
307 (e) Payments to DTC. Notwithstanding any other provision of this Resolution to the
308 contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTG payments with
309 respect to principal of, premium, if any, and interest on the Bonds and all notices with respect to the
310 Bonds shall be made and given, respectively, in the maoner provided in DTC's Operational
311 Arrangements, as set forth in the Representation Letter.
312
313
314
315
316
317
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
345
346
13. Deliverv: Apalication of Proceeds. The TaY Exempt Bonds when so prepazed and
executed shall be delivered by the Director, Office of Financial Services, to the Tax Exempt Bonds
Purchaser upon receipt of the purchase price, and the Tax Exempt Bonds Purchaser shall not be obliged to
see to the proper application thereof. The Taxable Bonds when so prepared and executed shall be
delivered by the Director, Office of Financial Services, to the Taxable Bonds Purchaser upon receipt of
the purchase price, and the Taxable Bonds Purchaser shall not be obliged to see to the proper application
thereof.
14. Funds and Accounts.
(a) Project Fund. There is created hereby a special fund of the City designated the "Block
39 Refunding Fund" (the "Refunding Fund"), to be held and administered by the City Treasurer or the
Director, Office of Financial Services, sepuate and apart from all other funds of the City. For the
convenience and proper administration of the Refunding Fund there is hereby created in the Project Fund
a"Tax Exempt Proceeds Account" and a"Taxable Proceeds AccounP' to be separately administered and
maintained as bookkeeping accounts in the Refunding Fund separate and apart from all other accounts
maintained therein. All proceeds from the sale of the Bo�ds, excluding accmed interest, shall be
deposited 'an the Refunding Fund and applied to: (i) payment of the costs of issuing the Bonds, and (ii)
the costs oP refunding the Prior Bonds. The proceeds of the Series 2009G Bonds shall be deposited in the
Tax Exempt Proceeds Account and, after payment of any costs of issuance to be paid from the proceeds
of the Series 2009G Bonds, shall be applied solely to refund and prepay the Series 1998A Bonds. The
proceeds of the Series 2009H Bonds shall be deposited in the Taxable Proceeds Account and, after
payment of any costs of issuance to be paid from the proceeds of the Series 2009H Bonds, shall be
applied solely to refund and prepay the Series 1998B Bonds.
(b) Debt Service Fund. There is created hexeby a special fund of the City designated the
`Block 39 Debt Service Fund" (the "Debt Service Fund") to be held and administered by the City
Treasurer or the D'uector, Office of Financial Services, sepazate and apart from all other funds of the City.
For the convenience and proper administration of the revenues to be applied to payment of the debt
seroice on the Bonds, and to provide adequate and specific security to the Taac Exempt Bonds Purchaser,
the Taxable Bonds Purchaser, and the Holders from time to time of the Bonds, there aze hereby created in
the Debt Service Fund the "Tas Increment AccounP' and the "Parking Revenues Account," each to be
administered and maintained as bookkeeping accounts in the Debt Service Fund separate and apart from
all other accounts maintained therein. The Debt Service Fund shall be maintained in the manner herein
specified until all of the Bonds and the interest thereon have been fully paid.
(i) Tax Increment Account. To the Tax Increment Account there is hereby pledged
and irrevocably appropriated and there shall be credited and used to pay debt service on the
Bonds as further provided herein: (A) all Tas Increments derived from the District and pledged
09-1012
347 to the payment of the Bonds (subject to any senior pledges or exclusions of such Tarc Increments
348 provided for in the Pledge Agreement and provided that Revenues in excess of amounts necessary
349 to pay the principat of and interest on the Bonds shall be released from the pledge as provided
350 herein); plus (B) all "shortfall payments" required to be paid to the HRA pursuant to the terms of
351 the Developer Shortfall Agreement, dated as of August 8, 1997, as amended and supplemented;
352 plus (iii) all investment eamings thereon.
353 (n) Parking Revenues Account. To the Parking Revenues Accountthere is hereby
354 pledged and irrevocably appropriated and there shall be credited all Net Parking Revenues, as
355 deternuned in accordance with the terms of the Pledge Agreement, plus all investment earnings
356 on funds held in the Pazking Revenues Account. Funds held in the Pazking Revenues Account
357 shall be used to pay debt service on the Bonds as further provided herein.
358 (iii) Order of Use of Accounts. The money credited to the Tar Increment Account
359 shall be applied first to payment of the debt service on the Bonds and the money credited to the
360 Parldng Revenues Account shall be applied to pay debt service on the Bonds oaly to the extent
361 that money credited to the Tar Increment Account is not sufficient for the payment of debt
362 service on the Bonds.
363 (iv) Tcr�r Increment Account Ezcess. Any money held in the Tax Increment Account
364 as of February 2 of each yeaz shall be transferred from the Tax Increment Account to the HRA
365 and may thereafter be used for any lawful purpose for which Tas Increments derived from the
366 District may then be used.
367 (v) Parking Account Ezcess. Any money held in the Pazking Revenues Account as
368 of February 2 of each year shall be transferred from the Pazking Revenues Account to the HRA
369 and may thereafrer be used for any lawful putpose for which Net Pazking Revenues may then be
370 used.
371 (vi) Reservation for Rebate. Prior to making the transfers provided for in ciauses (iv)
372 and (v), the City Treasurer shall estimate or cause to be estimated the amount of accrued liabffity
373 for rebatable azbitrage on account of the Tax Exempt Bonds, and shall than segregate all or a
374 portion of the money subject to transfer from the Tax Increment Account and the Parking
375 Revenues Account in accordance with clauses (iv) and (v) to make provision for the payment (or
376 reserve for the payment ofl any rebate due or to become due to the United States of America
377 arising from the investment of funds held in the funds and acaounts created by this Resolution.
378 (vii) Bona Fide Debt Service Fund. The Debt Service Fund, and the accounts therein,
379 shall be held and administered at all times as a"bona fide debt service fund" within the meaning
380 of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). Excess funds
381 shall be released or transferred from the Debt Service Fund at such times and in such amounts as
382 are required to comply wirh this clause (vii).
383 (c) Arbitrage Restrictions. The money in the funds shall be used solely as provided herein,
384 or to pay any rebate due to the United States. No poftion of the proceeds of the Tax Exempt Bonds shall
385 be used directly or indirectly to acquire higher yielding investments or to replace funds which were used
386 directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period
387 until such proceeds aze needed for the purpose for which the Tar Exempt Bonds were issued, and (ii) in
388 addition to the amounts referred to in clause (i) in an amount not greater than $100,000. To this effect,
389 any proceeds of the Tas Exempt Bonds and any sums from time to time held in the Debt Service Fund
390 allocated to the Tax Exempt Bonds (or any other City account which wi11 Ue used to pay principal or
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09-1012
391 interest to become due on the Tas Exempt Bonds) in excess of amounts which, under then applicable
392 federal arbitrage regulations, may be invested without regazd as to yield shall not be invested at a yield in
393 excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after
394 taking into account any applicable "temporary periods" or "minor portion" made available under the
395 federal arbitrage regulations. In addition, the proceeds of the Tax Exempt Bonds and money allocated to
396 the Tas Exempt Bonds in the Debt Service Fund shall not be invested in obligations or deposits issued by,
397 guazanteed by, or insured by the United States of America, or any agency or instnunentality thereof, if
398 and to the extent that such investment would cause the TaY Exempt Bonds to be deemed to be "federally
399 guaranteed" within the meaning of Section 149(b) of the Code.
400 (d) Allocation of Investment Earnings. Investment earnings, net of rebatable arbitrage, shall
401 be credited to the fund or account from which the investment was made.
402 (e) Other Accounts and Subaccounts. The City Treasurer is hereby authorized to create such
403 accounts or subaccounts within the Refunding Fund and the Debt Service Fund (and accounts therein) to
404 properly administer such funds and accounts and to assure compliance with the preceding pazagraphs, and
405 Sections 20 and 21 hereof. Specifically, the City Treasurer may create separate accounts and subaccounts
406 to hold and apply the proceeds of the Taxable Bonds and the Tax Exempt Bonds, and revenues pledged to
407 payment thereof.
408 15. Pledee of Tax Increments; Covera¢e Test. All of the Tas Increments (subject to the
409 terms of the Pledge Agreement and this Resolution) and Net Parking Revenues (subject to the terms of
410 the Pledge Agreement and this Resolution) are hereby pledged to the payment of the Bonds and the
411 interest thereon, but only to the extent of an amount equal, with other pledged sources, to one hundred
412 five percent (105%) of the principal and interest requirements of the Bonds. Revermes (both Tax
413 Increments and Net Parking Revenues) shall be used to pay debt service on the Bonds in accordance with
414 the terms of Section 14 of this Resolurion. Revenues received in each year in excess of the amount
415 required to pay the debt service on the Bonds shall be released from the funds, free and clear of the pledge
416 stated in this Section 15, as provided in Section 14 of this ResoluUon.
417 The Ta�c Increments aze such that if collected in full they, together with estimated collections of
418 Net Pazking Revenues, investment earnings, and other revenues herein pledged for the payment of the
419 Bonds, will produce at least five percent (5%o) in excess of the amount needed to meet when due the
420 principal and interest payments on the Bonds. The estimated amount of Tas Increments to be received
421 over the term of the Bonds, and the use of Tax Increments as provided herein, aze such that more than
422 twenty percent (20%) of the total amount to be paid as principal and interest on the Bonds over their term
423 sha11 be paid from Tax Increments, all within the meaning of Section 475.58 of the Municipal Debt Act.
424 Annually at the times taxes are required to be levied, the City shall estimate the sufficiency of the
425 Debt Service Fund. In the event that it is anUcipated that the aggregate amount in (or to be timely
426 received in) the Debt Service Fund will not be sufficient to pay principal of and interest on the Bonds to
427 become due in the next eighteen (18) months, the City shall levy an ad valorem tas in such amount as is
428 estimated, with other sources, to be necessazy to pay the princiQal of, and interest on, the Bonds to
429 become due during such period.
430 The Tax Exempt Bonds and Taxable Bonds shall be on a parity of lien.
431 16. Tas Increments; PledQe Aereement. The County Auditor has certified the original tax
432 capacity of real property within the Block 39 Tax Increment District, and has covenanted not to withdraw
433 or limit such request. Under the provisions of Section 469.177 of the Tax Increment Act, the County
434 Auditor will remit to the HRA as tax increment that portion of the taxes paid each yeaz on real property in
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09-1012
435 the Block 39 Tac Increment District which represents the ta�ces on captured taz capacity (being tas
436 capacity of the property less said oria nal tax capacity) provided that the HRA shall request that the
437 County Auditor remit such funds d'uectly to the City Treasurer. Tax increments not required to pay the
438 principal of and interest on the Bonds may be used for any proper purpose.
439 Prior to issuance of the Bonds, the City and HRA shall enter into the Pledge Agreement under the
440 terms of which the TaY Increments and Net Pazking Revenues pledged to payment of the Bonds are
441 remitted to the City. Tas Increments and Net Pazking Revenues may be pledged to other purposes by the
442 HRA. The priority of such pledges may be superior, subordinate, or on a parity with the pledge made in
443 this Resolution, such priority to be determined at the ume thereof. A superior or parity pledge of Tas
444 Increments shall only be made with the consent of the City, but a subordinate pledge may be made
445 without the consent of the City. Notwithstanding any provision herein to the contrary, the City reserves
446 the right to terminate or reduce the Tas Increments and Net Parking Revenues herein pledged to the
447 payment of the Bonds and interest thereon to the extent and in the manner pernutted by law so long as
448 such action does not preclude the City from paying when due the debt service on the Bonds or otherwise
449 impair the City's full faith and credit pledge to the Bonds.
450 17. General Oblieation Pledee. For the prompt and full payment of the principal and interest
451 on the Bonds, as the same respectively become due, the full faith and credit and taxing powers of the City
452 shail be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient
453 to pay all principal and interest then due on the Bonds payable therefrom, the deficiency shall be promptly
454 paid out of any other funds of the City which aze available for such pwpose, including the general fund of
455 the City, and such other funds may be reimbursed with or without interest from the Debt Service Fund
456 when a sufficient balance is available therein.
457 18. Certificate of Registration. The Director, Office of Financial Services, is hereby directed
458 to file a certified copy of this resolution with the County Anditor of Ramsey County, Minnesota, togethex
459 with such other information as the County Auditor shall require, and to obtain the County Auditor's
460 certificate that the Bonds have been entered in the County Auditor's Bond Register, and that the Pledge
461 Agreement has been filed with the County Auditor.
462 19. Records and Certificates. The officers of the City are hereby authorized and duected to
463 prepare and furnish to the Tax Exempt Bonds Purchaser and to the Tasable Bonds Purchaser, and to the
464 attorneys approving the legality of the issuance of the Bonds, cert�ed copies of all proceedings and
465 records of the City relaUng to the Bonds and to the fmancial condition and affairs of the City, and such
466 otk�er affidavits, cettificates, and information as are required to show the facts relating to the legaliry and
467 marketability of ihe Bonds as the same appeaz from the books and records under their custody and control
468 or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any
469 heretofore furnished, shall be deemed representations of the City as to the facts recited therein.
470 20. Ne¢ative Covenants as to Use of Proceeds and Improvements. The City hereby
471 covenants not to use (or permit the HRA to use) the proceeds of the Taac Exempt Bonds or to use (or
472 pernut the IIRA to use) the facilities financed with the proceeds of the Tas Exempt Bonds, or to cause or
473 permit (or pemut the HRA to cause or permit) them or any of them to be used, or to enter into (or permit
474 the ARA to enter into) any deferred payment arrangements for the cost of such facilities, in such a manner
475 as to cause the TaY Exempt Bonds to be "private acavity bonds" within the meaning of Section 103 and
476 Sections 141 through 150 of the Code. The City hereby covenants not to use (or to permit the HRA to
477 use) the proceeds of the Tas Exempt Bonds in such a manner as to cause the Tax Exempt Bonds to be
478 "hedge bonds" within the meaning of Section 149(g) of the Code.
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..
..
21. Tax Exempt Status of the Tax Exempt Bonds: Rebate: Elections. The City shall comply
with all requirements necessary under the Code to establish and maintain the exclusion from goss income
under Section 103 of the Code of the interest on the Tas Exempt Bonds including, without limitation,
requirements relating to temporary periods for investments, limitations on amounts invested at a yield
greater than the yield on the Ta�c Exempt Bonds, and the rebate of excess investment earnings to the
United States. ff any elections aze now or hereafter available with respect to arbitrage or rebate matters
relating to the Tas Exempt Bonds, the Mayor, Clerk, City Treasurer, and Director, OfFice of Pinancial
Services, or any of them, aze hereby authorized and d'uected to make such elec6ons as they deem
necessary, appropriate, or desirable in connection with the Tax Exempt Bonds, and all such elections shall
be, and shall be deemed and treated as, elections oP the City.
489 22. No Designataon of Qualified Tas Exemot Obli a�ons. The Tax Exempt Bonds, together
490 with other obligations issued by the City in 2009, exceed in amount those which may be qualified as
491 "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and hence aze
492 not designated for such purpose.
493
494
495
496
497
498
499
500
501
502
503
504
505
506
507
508
509
510
511
512
513
514
515
516
517
23. Other AQreements: Official Statement. There have been submitted to this City Council
the Porm of the Pledge Agreement between the City and the HRA and the Official Statement. The Pledge
Agreement is hereby approved, and sha11 be executed on behalf of the City by the Mayor, City Clerk, and
Director, Office of Financial Services, in substantially the form approved, with such changes,
modifications, additions, and deletions as shall be necessary and appropriate and approved by the City
Attomey. So long as the Bonds remain outstanding, the City shall comply with the provisions of the
Pledge Agreement as from time to time supplemented or amended. The use and distribution of the
OfFicial Statement, and of an Addendum to the Official Statement, by the Tar Exempt Bonds Purchaser in
connection with the offer and sale of the Tas Exempt Bonds and by the Tasable Bonds Purchaser in
connection with the offering and sale of the Taxable Bonds is hereby approved. The Mayor, City Clerk,
and Director, Office of Financial Services are authorized and directed to ceRify that they have examined
the Official Statement, as supplemented by the Addendum to the Official Statement, and that to the best
of their knowledge and belief the Official Statement is a complete and accurate representation of the facts
and representations made therein as of the date of the Official Statement and that the Official Statement
does not, at the date of closing, and did not, as of its date, contain any untrue statement of a material fact
or omit to state any material fact necessazy in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
24. Continuine Disclosure. In order to satisfy the continuing disclosure requirements of
Rule 15cZ12(b)(5), 17 CFR §240.15c2-12, promulgated by the Securities Exchange Commission under
the Securities Exchange Act of 1934, as amended, the appropriate officials of the City ue hereby
authorized and directed to execute and deliver a continuing disclosure undertaking substantially in the
form of the Continuing Disclosure Certificate set forth in Appendix II of the Official Statement (the
"Continuing Disclosure Certificate"). The Continuing Disclosure Certificate is hereby approved with
such changes, modifications, additions, and deletions as shall be necessazy and appropriate and approved
by the City Attorney.
518 25. Severabilitv. Tf any section, pazagraph, or provision of this resolution shall be held to be
519 invalid or unenforceable for any reason, the invalidity, or unenforceability of such section, pazagraph, or
520 provision shall not affect any of the xemaining provisions of this Resolution.
521 26. HeadinQS. Headings in this Resolution aze included for convenience of reference only
522 and aze not a part hereof, and shall not limit or define the meaning of any provision hereof.
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09-1012
Requested by Department of:
�
B _�_
Approved by City
By: /^-� �
ta Council
Adoption Cert�ed by C uncil Secretary B y'
BY� ��"L1Di�/�.i�
Approved by // Date
Mayor: j � � n
��
14
Adopted by Date
Cauncil: ��j �d�
09-1012
EXFIIBIT A
FORM OF TAX EXEMP'f BOND
UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
C1TY OF SAINT PAUL
�
INTEREST RATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
GEI�ERAL OBLIGATION TAX INCREMENT
REFUNDING BOND SERIES 2009G
DATE OF
MATURITY DATE ORIGINAL ISSUE
$
CUSIP
DOLLARS
KNOW ALL PERSONS BY THESE PRESENfS that the City of Saint Paul, Ramsey County,
Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to
the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the
principai amount specif'ied above, on the maturity date specified above, unless called for eazlier
xedemption, and to pay interest thexeon semiannually on February 1 and August 1 of each yeaz (each, an
"Interest Payment Date"), commencing Februazy 1, 2010, at the rate per annum specified above
(calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has
been provided for. This Bond will beaz interest from the most recent Interest Payment Date to which
interest has been paid or, if no inierest, has been paid, from the date oF original issue hereof. The
principal of and premium, if any, on this Bond are payable by check or draft in next day funds or its
equivalent (or by wire transfer in immediately available funds if payment in such form is necessary to
meet the timing requirements below) upon presentation and surrender hereof at the principal office of the
Saint Paul Treasurer, aaing as paying agent, or any successor paying agent duly appointed by the Issuer.
The principal of and premium, if any, and interest on this Bond aze payabie in lawful money of the United
States of America.
Date of Pavment Not Business Day. If the date for payment of the principal of, premium, if any,
or interest on this Bond shall be a Saturday, Sunday, legal holiday, or a day on which banking institutions
in the City of New York, New York, or the city where the principal offfce of the Registrar is located are
authorized by law or executive order to close, then the date for such payment shall be the nexi succeeding
day which is not a Saturday, Sunday, legal holiday, or a day on which such banking institutions aze
authorized to close, and payment on such date shall have the same force and effect as if made on the
nominal date of payment.
Redemption. All Bonds of this issue (the "Bonds") maturing in the yeazs 20_ through 20_,
both inclusive, aze subject to redemption and prepayment at the option of the Issuer on Februazy 1, 20_,
and on any day thereafrer at a price of par plus accmed interest. Redemption may be in whole or in part
of the Bonds subject to prepayment. ff redemption is in part, those Bonds remaining unpaid may be
prepaid in such order of maturity and in such amount per maturity as the City shall determine; and if only
A-1
09-1012
part of the Bonds having a common maturity date are called for prepayment, this Bond may be prepaid in
$5,000 increments of principal. Bonds or portions thereof called for redemption shall be due and payable
on the redemption date, and interest thereon shall cease to accrue from and afrer the redemption date.
Notice of Redemption. Mailed notice of redemption shall be a ven to the paying agent (if other
than a City officer) and to each affected Holder of the Bonds. In the event any of the Bonds aze called for
redemption, written norice thereof will be given by fsst class mail mailed not less than thirty (30) days
prior to the redemption date to each Holder of Bonds to be redeemed. In connection with any such notice,
the "CUSIP" numbers assigned to the Bonds shall be used.
Issuance: Pumose: General Obli ag tion. This Bond is one of an issue in the total principal amount
of the Issuer's $ General Obligation TaY Increment Refunding Bonds, Series 2009G (the
`Bonds"), all of like date of origiaal issue and tenor, except as to number, maturity, interest rate,
denomination, and redemption privilege, which Bond has been issued pursuant to and in full conforarity
with the Constitution and laws of the State of Minnesota, including partiwlazly Minnesota Statutes,
Section 469178, and the Charter of the Issuer, and pursuant to a resolution adopted by the City Council
of the Issuer on September 16, 2009 (the "Resolution"), for the purpose of providing funds for the
refunding of existing indebtedness. This Bond is payable out of the Block 39 Debt Service Fund, to
which have been pledged tax increments zeceived fzom the Block 39 Tax Increment Distzict in the City
and certain net pazking revenues derived from a pazking facility located in the Block 39 Tas Increment
District. This Bond constitutes a general obligation of the Issuer, and to provide money for the prompt
and full payment of its principal, premium, if any, and interest when the same become due, the full faith
and credit and taxing powers of the Issuer have been and are hereby inevocably pledged.
Denominations: Resolution. The Bonds are issuable originally only as fully registered bonds in
the denominations of $5,000 and integral multiples thereof of a single maturity. Reference is hereby
made to the Resolution for a description of the rights and duties of the Registrar. A copy of the
Resolution ise on file in the principal office of the Registraz.
Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by
presenting this Bond for registration to the Registraz, who will endorse its name and note the date of
registration opposite the name of the payee in the certificate of registration attached hereto. Thereafrer
this Bond may be transferred by delivery with an assignment duly executed by the Holder or its legal
representatives, and the Issuer and Registrar may treat the Holder as the person exclusively entitled to
exercise all the rights and powers of an owner until this Bond is presented with such assignment for
registration of transfer, accompanied by assurance of the nature provided by law that the assignment is
genuine and effective, and until such transfer is registered on said books and noted hereon by the
Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations
of the Issuer contained in any agreement with, or notice to, the Registraz. Transfer of this Bond may, at
the direction and expense of the Issuer, be subject to certain other restrictions if required to qualify this
Bond as being "in registered form" within the meaning of Section 149(a) of the Internal Revenue Code of
1986, as amended.
Fees uaon Transfer or Loss. The Registraz may require payment of a sum sufficient to cover any
tas or other governmental charge payable in connection with the transfer or exchange of this Bond and
any legal or unusual costs regazding transfers and lost Bonds.
Treatment of Registered Owner. The Issuer and Registrar may treat the person in whose name
this Bond is registered as the owner hereof for the purpose of receiving payxnent as herein provided
(except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not
A-2
09-1012
this Bond shall be overdue, and neither the Issuer nor the Registrar shall be affected by notice to the
contrary.
Authenticauon. This Bond shall not be valid or become obligatory for any purpose or be entitled
to any security unless the Cert�cate of Authentication hereon shall have been executed by the Registrar.
Not Oualified Tax Exempt Oblieations. The Bonds have not been desi�ated by the Issuer as
"qual�ed taY-exempt obligations" for purposes of Section 265(b)(3) of the federal Intemal Revenue
Code of 1986, as amended.
IT' IS HEREBY CERTINIIED AND RECITED that all acts, conditions and things required by the
Constitution and laws of the State of Minnesota and the Charter of the Issuer to be done, to happen and to
be performed, precedent to and in the issua�ce of this Bond, have been done, have happened and have
been performed, in regular and due form, time, and manner as required by law, and this Bond, together
with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its
issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or Charter
limitation of indebtedness.
(The remainder of this page is intentiooally left blank.)
A-3
o9-ioiz
IN WITNESS WHEREOF, the City of Saint Paul, Ramsey County, Minnesota, by its City Council
has caused this Bond to be sealed with its official seal and to be executed on its behalf by the facsimile
signature of its Mayor, attested by the facsimile si�ature of its C1erk, and countersigned by the facsimile
signature of its Duector, Office of Financial Services.
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
Mayor
Attest:
City Clerk
Countersigned:
Director, Office of Financial Services
(SEAL)
I_Q!
09-1012
CERTIETCAT`E OF AU1'HENTICATION
This is one of the Bonds delivered pursuant to the Resolutions mentioned within.
CITY OF SAINT PAUL, MINNESOTA
�
City Treasurer
�
09-1012
ASSIGNMENT
For value received, the undersia ed hereby sells, assigns and transfers unto
the within Bond and all righu thereunder, and does
hereby inevocably constitute and appoint attorney to transfer the said
Bond on the books kept for registration of the within Bond, with full power of substitution in the
premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration or
any cha�ge whatever.
Signature Guaranteed:
NOTICE: Sip ature(s) must be guazanteed by a financial institution that is a member of the Securities
Ttansfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the
New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature
guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP,
SEMP or MSP, all in accordance with the Securities Excha�ge Act of 1934, as amended.
The Registraz will not effect transfer of this Bond unless the information conceming the assignee
requested below is provided.
Name and Address:
(Include information for all joint owners if this Series 2009C
Bond is held by joint account.)
Please insert social security or other identifying number of assignee
(The remainder of this page is intentionally lefr blank.)
�
09-1012
EXHBIT B
FORM OF TAXABLE BOND
UNITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
�
TAXABLfi GENERAL OBLIGATION TAX INCREMENT
REFUNDING BOND, SBRIES 2009H
INTEREST RATE
DATE OF
MA1`URITY DATE ORIGINAL ISSUE
CUSIP
REGISTERED OWNER:
.. � �.. �� �.r
DOLLARS
KNOW ALL PERSONS BY TI�SE PRESENTS that the City of Saint Paul Ramsey County,
Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to
the registered owner specifted above, or registered assigns, in the manner hereinafter set forth, the
principal amount specified above, on the maturity date specif"ied above, and to pay interest thereon
semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing
February 1, 2010, at the rate per annum specified above {calculated on the basis of a 360day year of
twelve 30-day months) until the principat sum is paid oz has been provided for. This Bond will beaz
interest from the most recent Interest Payment Date to which interest has been paid or, if no interest, has
been paid, from the date of original issue hereo£ The principal of and premium, if any, on this Bond aze
Qayable by check or draft in next day funds or its equivalent (or by wire transfer in immediately available
funds if payment in such focm is necesary to meet the timing cequirements below) upon presentation and
sucrender hereof at the principal office of the Saint Paul Treasurer, aciing as paying agent, or any
successor paying agent duly appointed by the Issuei. The principal of and premium, if any, and interest
on this Bond aze payable in lawful money of the United States of America.
Date of Pavment Not Business Day. If the date for payment of the .principal of, premium, if any,
or interest on this Bond shall be a Saturday, Sunday, leaal holiday or a day on which banking institutions
in the City of New York, New York, or the city where the principal office of the Registrar is located aze
authorized by law or executive order to close, then the date for such payment shali be the next succeeding
day which is not a Saturday, Sunday, legal holiday or a day on which such banking insritutions aze
authorized to close, and payment on such date shall have the same force and effect as if made on the
nominal date of payment.
Issuance: Purpose: Generai Obligarion. This Bond is one of an issue in the total principal amount
of the Issuer's $ Tasable General Obligauon Tas Increment Refunding Bonds, Series 2009H
(the `Bonds"), all of like date of original issue and tenor, except as to number, maturity, interest rate,
denomination, and redemption privilege, which Bond has been issued pursuant to and in full conformity
with the Constitution and laws of the State of Minnesota, including particularly Minnesota Statutes,
�
o9-ioia
Secrion 469.178, and the Charter of the Issuer, and pursuant to a resolution adopted by the City Council
of the Issuer on September 16, 2009 (the "Resolutton"), for the purpose of providing funds for t�e
refunding of existing indebtedness. This Bond is payable out of the Block 39 Debt Service Fund, to
which have been pledged taY increments received from the Block 39 Ta�c Increment District in the City
a�d certain net pazking revenues derived from a parking facility located in the Block 39 Tax Increment
District. This Bond constitutes a general obligation of the Issuer, and to provide money for the prompt
and full payment of its principal, premium, if any, and interest when the same become due, the full faith
and credit and tarcing powers of the Issuer have been and are hereby urevocahly pledged.
Denominations: Resolution. The Bonds are issuable originally only as fully registered bonds in
the denominations of $5,000 and integral multiples thereof of a single maturity. Reference is hereby
made to the ResoluGOn for a description of the rights and duties of the Registraz. Copies of the
Resolution aze on file in the office of the Registraz,
Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by
presenting this $ond fot registration to the Regstrar, who wiil endorse its name and note the date of
registration opposite the name of the payee in the cert�cate of registration attached hereto. Thereafter
this Bond may be transferred by delivery with an assignment duly executed by the Holder or its legal
representatives, and the Issuer and Registrar may treat the Holder as the person exclusively entitled to
exercise all the rights and powers of an owner until this Bond is presented wiffi such assignment for
registration of transfer, accompanied by assurance of the nature provided by law that the assignment is
genuine and effective, and until such transfer is registered on said books and noted hereon by the
Registraz, atl subject to the terms and conditions provided in the Resolution and to reasonable regulations
of the Issuer contained in any agreement with, or notice to, the Registraz. Transfer of this Bond may, at
Che direcrion and expense of the Issuer, be subject to certain other restricrions if required to qualify this
Bond as being "in registered form" within the meaning of Section 149(a) of the federat Internal Revenue
Code of 1986, as amended.
Fees uoon Transfet or Loss. The Registraz may require payment of a sum sufficient to cover any
tax or other governmental chazge payable in connection with the transfer or exchange of this Bond and
any legal or unusual costs regarding transfers and lost Bonds.
Treatment of Registered Owner. The Issuer and Registraz may treat the person in whose name
this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided
{except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not
this Bond shali be overdue, and neither the Issuer nar the Registrar shall be affected by notice to the
conuary.
Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled
to any security unless the Certificate of Authentication hereon shail have been executed by the Registraz.
IT I5 HEREBY CERTIFIED ANU RECITED that all acts, conditions and things required by the
Consiitution and laws of the State of Minnesota and the Cbazter of the Issuer to be done, to happen and to
be performed, precedent to and in the issuance of this Bond, have been done, have happened and have
been perfornied, in regular and due form, time and manner as required by law, and this Bond, together
with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its
issuance and delivery ro the original purchaser, does not exceed any constitutional or statutory or Charter
limitation of indebtedness.
B-2
o9-io�z
IN VJTTNESS WHEREOF, the City of Saint Paul, Ramsey County, Minnesota, by its City
Council has caused this Bond to be sealed with its o�cial seal and to be executed on its behalf by the
facsimile signature of its Mayor, attested by the facsimile signature of its Clerk, and countersigned by the
facsimile si�mature of its Director, Office of Financial Services.
CITY OF SAINT PAUL,
RAMSEY COUNTY, MINNESOTA
Mayor
Attest:
City Clerk
Countersigned:
Director, Office of Financial Services
(SEAL)
I•.�L?
09-1012
CERTIFTCATE OF AUTFIENTICATION
This is one of the Bonds delivered pursuant to the Resolutions mentioned within.
CITY OF SAINT PAUL, MINNESOTA
I�
City Treaswer
�
09-1012
AS5IGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and ali rights thereunder, and does
hereby irrevocably constitute and appoint attorney to transfer the said
Bond on the books kept for registration of the within Bond, with full power of substitution in the
premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the wiChin $ond in every particulaz, withQUt alteration or
any change whatever.
Signature Guazanteed:
NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities
Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the
New York Stock Exchange, Inc. Medallion Sia atures Program ("MSP") or other such "signature
guazantee program" as may be detemuned by the Registrar in addition to, or in substitution for, STAMP,
SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended.
The Registrar will not effect transfer of this Bond unless the informauon concerning the assignee
requested below is provided.
Name and Address:
(Include information for all joinC owners if this Series 2009C
Bond is held by joint account.)
Please insert social security or other identifying number of assigc�ee
(The retnainder of this page is intentionally left biank.)
sas8s-is �aw,�
346000v.2
�
Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet
,..__......__.,,.�_,,._..--:•- ..-•-•_.,-.-_ aq����a-
FS —F�nanciaf Services
CoMaet Person 8 Pfione;
Bob Geurs
266-8837
Must 6e on Council qqenda by (Date):
16-SEP-09
T� RESOLUTION W!$
l'RANSACTION
E-Docume�rt Required: N
OocumeM Co�act: �b Geurs
CoMact Phone: 266-8837
O8 SEP 2009
N
Assign
Num6er
For
Routing
Order
SoYal # of Signature Pag _(Clip AII Loptions for Signature)
Action Requested:
Green Sheet NO: 3079056
0 I�Snavcial Services I I I
1 ipa¢cia1S¢rvices De arhnentDirector
2 waneial Services ce Finavcial Services
3 ' Atlnrn
4 m"s Office orlAss�stant
5 unN C' Conncil
Approve awarding the sale of GO T�iZefunding Bonds, Series 2009 G and taxable GO T'I Refunding Bonds, series 2009 H, fixing
the foim and terms of the bonds and directing the execution and delivery; and pledging fax increments and certain parking revenues
for the payfsent thereof.
Recommendafions: Approve (A) or Reject (R):
Planning Commission
Ci6 Committee
Civil Service Commission
Personal Service Contracts Must Answer the Following Questions:
1. Has this person/firm ever worked under a contract for this department?
Yes No
2, Has this person/firtn ever been a city employee?
Yes No
3. Does this person/firtn possess a ski➢ not nortnally possessed by any
current city employee?
Yes No
Explain alf yes answers on sepatate sheet and attach W green sheet.
fnitiating Problem, Issues, Opportunity (Who, What, When, Where, Wby):
The City is proposing to refund GO TI Bonds (Block 39 project), Series 1998 A and taxable GO IT Eonds (Block 34 project), Series
1998 B and lower debt service.
Advantages If Approved: �
1998 A and Y998 B GO TT Bonds will be refunded and debt service will be lowered.
Disadvantages If Approved:
None Known
�.. �'� , �. ..
i ��
� ��+'�
DisadvanWges If NotApproved:
1998 A adn 1998 B GO TI Bonds wi11 not be refunded
Toul Amoum of $27 510,000.00
Tmnsaction:
Fundine Source; Band proceeds
Financial lnformation: ypd $8,845,000.00
(E�cplain)
Activity Number:
CosURevenue Budgeted:
Sefltember 8. 2009 9:27 AM pa�p �
09-1412
EXHIBIT A
Agenda #30
CF-09-1012; GS 3079056
COMPLETIONS AND CONFORMING DETAILS
FOR
GENERAL OSLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2009G
TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS,
SERIES 2009H
There is before this Council a draft resolution For the sale af the above bonds that requires certain
completions and details that conform to terms of sale. The C1erk or bond counsel for the Bonds shall
revise the draft resolution to read as it should with the campleuons and details provided here directly or
by reference to other materials before this Council. Spots in the resolutiQn are noted in the second
column. The third columu is optional but may contain the cornp]etion or note the specific sanrce of the
other materials.
SPOTS IN THE COMPLETION, DETAIL
COMPLETIONS AND DETAILS RESOLUTION OR SOURCE (OPTIONAL)
l. Winning Pxouoser — Serias 2009G Bonds. Section 2 BMO Capital Markets
Other materials before this Council indicate
the winning Tax Exempt Sonds Purchaser,
whose name shal] be inserted in Section 2.
2. Wionine Proposer — Series 2009H Bonds. Section 3 NQrthland Securities, lnc.
Other materials before this Council indicate
the winning Taxable Bonds Purchaser, whose
name shall be inserted in Section 3.
3. Princioal Amounts — Series 2009G Bonds. Sections ], 2 and Par amount changed to
Other materials before this Council indicate 4 $20,695,��0
the principal amount af the Series 2009G
Bonds and the principal amounts of each See attached schedule on
maturity. Exhibit B
4. Principa] Amounts — Series 2009H Bonds. Sections l, 3 and Par amount ehanged to
Other materials before this Council indicate 4 $8,655,�00
the principal amount of tha Series 2009H
Bonds and the principal amounts of each See atcached schedule on
mafirity. Hxhibit C
5. PurchasePrice—Series2009GBonds. Other Section2 $21,347,02].75
materials before this Council indicate the
proposed purchase price of the Series 2009G
Bonds.
A-1
09-1012
6. Purchase Price — Series 2009H Bonds. Other Section 3 $&,194,562.95
materials before this Conncil indicate the
proposed purchase price of the Series 2009H
Bonds.
7. Tnterest Rates — Series 2009G Bonds. Other Section 2 See attached schedule on
materials before this Council indicate the Exhibit B
interest rates for the matnrity dates of the
Bonds to be added to the schedule in
Section 2 of the resolution
8. Interest Rates — Series 2009H Bonds. Other Section 3 See attached schedule on
matarials before this Council indicate the Exhibit C
interest rates for the maturity dates of the
Bonds to be added to the schedule in
Section 3 of the resolution
9. Redemotion Provisions — Series 2009G Section 7 Not Applicable
Bonds. Other materials before this Council
indicate the redemption provisions for d�e
Series 3009G Bonds m be iocluded in
Secrian 7 of the resolution.
SA385-075 (3U) A-2
355464v.2
o9-ioia
EXHIBIT B
Saint Paul City, Minnesota
General Obligation Tax Increment Refunding Bonds
Series 2009G
TERMS AND CONDITIONS
True Interest Cost for the Series 2009G Bonds: 3.1434390�Ic
The Series 3009G �ands shall mature on the dates and in the principa3 amounts set forth below:
Maturity Year Principal Interest Bond
(February 1) Amount Rate Pield
2015
2016
2077
2018
2019
2020
2027
2022
2023
202A
2025
* P�iced to the fzrst �ptiona( call ctate of Februar7� 7, 2018.
B-1
$ 820,000
3,725,000
1,800,000
1,850,000
1,855,000
1,92QOD0
],985,000
�,055,000
�,125,000
�,225,000
2,335,000
4.00%
4.00
4.00
4.00
3.00
3.]25
3.125
3.50
3.50
3.50
3.50
1.97%
2.20
2.45
2.68
2.84*
2.96"
3.08x
3.18r
3.28*
3.375 *
3.47x
Price
7 ] 0.136%
] ] 0.506
110.278
] 09.743
101.17]M
107.20]'
] 00.323'
102310�
10] .580*
100.893�
]00.21a*
09-1012
EXHIBIT C
Saint Paul City, Minnesota
Taxable General Obligation Tax Increment Refunding Bonds,
Series 2009H
TERMS AND CONDITIONS
Tme Interest Cost for the Series 2009H $onds: 2_4672097�7�
The Series 2Q09H Bonds shall mature on the dates and in the priucipal amounts set forth 6elow:
Maturity Year Principal Interest Bond
(February 1) Amount Rate Yield Price
2010
2011
2072
2013
2014
2015
$],245,000
1,575,000
] ,605,000
1,640,000
1,7]q000
830,000
3.10%
3.10
3.10
3.10
3.10
3.10
Gl
0.50%
l.]5
l .75
2.25
2.85
3.10
] 00.734�0
102.475
7 03.007
] 02.673
] 00.998
100.000
Springsted
September 16, 2D09
Ms. Margaret Keily, Director of Financiai Services
Office of Financial Services
700 City Hall
15 West Kellogg Boulevard
Saint Pauf, Minnesota 55102
RE:
,�9-ioia
s y �:<� ��� ,��z�
ie� ��.xs�- a; ,. s� �
s: - _ . , _� , za�i
-� .��,--aa-s� c
:., .� -z_�-a :�
Recommendations for Award ofi the City of Saint Paul's:
$14,235,000* General Obligation Capital Notes, Series 2009F;
$20,695,000* General Obligation Tax Increment Refunding Bonds, Series 2009G; and
$8,655,O�U* Taxable General Obiigation Tax Increment Refunding Bonds, Series 2U09H,
(coilectively, the "Issues" or "Bonds")
Dear Ms. Kelly:
This letter summarizes the results of the competitive bids opened this morning for the three Issues listed above.
Purpose and Repayment Sources of Issues
The purpose of the Notes is to finance the purchase and instailation of the City Operations Modemization antl
Enterprise Transformation ("COMET") project. The Notes will be repaid by general property tax levies.
The purpose of the two 71F Refunding Bonds is to refinance two TIF bond issues marketed in 1998 associated with
the Block 39/Lawson Project. The goals of the Refunding are both to achieve interest cost savings and to adjust the
debt repayment schedule to match revised TIF revenue estimates after the impact of state statutory changes. The
two issues, taac-exempt and taxable, refiect the tax status of the 1998 issues. 7a�ble municipal bond issues reflect
the conveyance of a benefit io a private party, in this case reflecting the original development arrangement.
Municipai Market Rates
The municipal tax-exempt market continues in a very low range for those issuers with good cretlit quality, such as
the City of Saint Paul. The national index of these interest rates, the BBI, continues in a low range, at present the
very low point of 4.33°l0. This fevel is approaching a 30-year low poini in the tae-exempt markeL We have attached
a graph of the BBI covering the last several years which shows the recent reduction in interest rates.
*Please see section on premium bidding.
Pubhc Sector Ativisors
09-1012
City of Saint Pau{, Minnesota
September 16, 2009
Page 2
Sale Results
The City received six bids on the Note Issue. The senior managers of the bidding syndicates were as folfows:
Rank Bidder TIC °fo
BMO Capital ............................ 2.295
JP Morgan ..................... ......... 2.318
Robert Baird ........................ .. 2.339
Piper,laffray ............................ 2.340
Welis Fargo ............................ 2.378
BB&T Capital ........................... 2.420
The lowest (or best} bid was receivetl from BMO Capital Markets at a true interest rate of 2.295%. Our estimate of
interest rates from eariy August for this Issue was 2.56°(0.
The City received eight bids on the tax•exempt TIF Issue:
Rank Bidder T{C(°!o)
BMO Capital ......... .... ............. 3,141
JP Morgan ........... ................... 3.232
Ro6ert Baird ............................ 3.259
Cronin & Co . ........................... 3.329
Morgan Stanley ....................... 3.331
Hutchinson Shockey ................ 3.343
Piper Jaffray ............................ 3.364
BB&T Capital ...... .................... 3.431
The lowest (or best) bid was received from BMO Capital Markets at a true interest rate of 3.141 °fo. Our estimate of
interest rates from early August for this issue was 3.54%.
The City received nine bids on the taxable TIF Issue:
Rank Bidder TIC %
Northland Securities ................ 2.466
Piper Jaffray ............................ 2.509
BMO Capitai ............................ 2.540
Robert Baird ................... ........ 2.551
Cronin & Co ............................. 2.564
UBS Financial .......................... 2.588
Morgan Keegan ....................... 2.607
FTN Financial .......................... 2.629
Stifel Nicolaus .......................... 2.768
The lowest (or best) 6id was received ftom Northland Securities at a true interest rate of 2.466°!n. Our est+mate of
interest rates from early August for this Issue was 2.86%. The difference in estimates behveen the tax-exempt and
09-1012
City of Saint Paul, Mi�nesota
September 16, 2009
Page 3
taxable issues reflects the much shorter repayment period of the taxable issue as compared to the tax-exempt issue,
in addition to the norma! difference between the two interest rate markets.
We require bidders to submit their bids on a"True Interest Rate" (TIC) basis, so as to reflect the present value of
their bids antl, thereby, ensure the award is based on the lowest cost to the City. We have encfosed bid tabulation
forms for each Issue summarizing the bid specifics and composition of each underwriting syndicate.
Premium Bidding
The curreni interest rate market has caused investors to look for protection from upward pressures on interest rates
by requinng premium bonds. Premium bonds are securities where investors are willing to provide the issuer with
more funds than the debt requirement in exchange for interest rate payments in excess of current market levels.
This situation was reflected in all of the Issues. This payment beyond the debt requirement is used to reduce the
amount of debt so the resulting total principal and interest payments reflect the City's objectives.
For these Issues the Note principai was reduced to $14,235,000 from $14,4D0,000; the tax-exempt TIF Refunding
issue to $20,695,000 from $21,510,000; and the taxable TIF Refunding Issue to $8,655,000 from $8,845,0��.
Recommendation
We recommend award(sj of sale to:
BMO Capital Markets for the Note and lax-exempt TIF Refunding Bonds, and
Northland Securities for the Taxahle TIF Refunding Bonds.
Sasis of Recommendation
We believe the interest rates received by the City today refilect aggressive market levels. This is evidenced by the
number of bidders, their general close proximity to one another, and the significant actual results being well below
estimate. On the tax-exempt and taxable TlF refunding issues, the respective net present value savings, net of afl
issuance costs, are $2,510,993.70 and $631,141.48, respectively. We evaluate savings levels by determining the
percent of net present value savings to the present value of refunded tlebt service. The actual results are 10.36%
and 6.60%, respectiveiy. This percentage is well in excess of generally recommended levels for this type of
refiunding. These net savings levels are well in excess of original estimates. Finally, the broad market is in this very
low range which has yielded these benefits for the City.
Credit Rating
The City's ge�eral obiigation rating for these Issues were reaffirmed by Standard & Poor's at AAA and Moody's
at Aa2. The respective rating age�cy reports present each agency's perspectives on the City's credit quafity. The
Gity conducted a series of discussions with the two agencies as part of this rating process. The AAA rating is an
exceptional credit designation and its continuance by the Cit�+ in diffioult budget and economic times demonstrates
09-1012
City of Saint Paul, Minnesota
Septem6er 16, 2��9
Page 4
the qua�ity of decision-making by its elected officiais and the management of its stafif. We have attached copies of
the rating reports for the City.
We welcome any questions regarding this sale process and congratulate the City on completion of a successful
sale process.
Respectfuity,
�J>� � ��c_�; l
/
David N. MacGiliivray, Chairman
Client Representative
��
Enclosures
cc: Mr. Todd Hurley, City Treasurer
Mr. Robed Geurs, City Debt, Structured Finance and TIF Manager
09-1012
SBI 25-bond (Revenue) and 20-bond (G.O.} Rates tor 5 Years Ending 9/10i2009
6.6%
6.4%
62%
6.0%
5.8%
5.6%
,a 5.4%
� 52%
5.0°l0
4.8%
4.6%
4�.4%
4.2%
4. �
o � o °` o\o� o � o h o � o h o � o � o � o � o � o � o � o � Q � o 1 0 � 0 1 o � o �a o � o w o � o w o � o � o � o � o � o �
��'� �.�'� h�'� ��'� �.�� h�� ��'� �.�'� h� ��'� ��� h� a�� ��� h�� e��
�=3=1F�i:• •I
�l:li��:...
Dates
o9-ioia
� Springsted
$8,845,000"
CITY OF SAINT PAUL, MINNESOTA
Springsted tncotporffied
38Q .tackson SUeet, Suite 300
SaintPaul,MN 55101-2887
Tel: 651-223-3000
Fax: 651-2233002
Email: advisors@springsted.com
www.springsted.com
TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2009H
(BOOK ENTRY ONLY)
AWARD:
SALE:
NORTHLAND SECURIT{ES
September 16, 2009 Moody's Rating: Aa2
Standard & Poor's Rating: AAA
Interest Netlnterest True Interest
Bidder Rates Price Cost Rate
NORTHLAND SECURITIES
PIPER JAFFRAY & CO.
BMO CAPfTAL MARKETS GKST INC.
CITfGROUP GLOBAL MARKETS, 4NC.
CABRERA CAPITAL MARKETS, LLC
ROBERT W. BAIRD & COMPANY,
INCORPORATED
C.L. KING 8 ASSOCIATES
DAVENPORT & COMPANY LLC
LOOP CAPITAL MARKETS, LLC
KILDARE CAPITAL
SAMCO CAPITAL MARKETS, {NC.
WEDBUSH MORGAN SECURITIES
CREWS & ASSOCIATES
UMB BANK, N.A.
UNITED BANKERS' BANK
CRONiN & COMPANY, INC.
3.10°l0 2010-2015
D.50% 2010
120°/a 2011
1.95% 2012
2.25°/a 2013
2.85% 2014
3.30% 2015
1.25% 2010
1.50°10 2011
1.75°/a 2012
2,45°fo 2013
2.75% 2014
3.3�°!0 2�15
0.90% 2010
1.20% 2011
1.95°l0 2012
2.25°fo 2013
2.85% 2014
3.10% 2015
2.00% 2010-2012
2.20% 2013
2.95% 2014
3.10% 2015
$8,987,710.74 $589,542.84
$8,834,362.75 $594,317.67
$8,832,A69.05 $661,367.20
$8,517,821.25 $603,332.00
$8,841,435.05 $606,901.49
2.4659%
2.5086°fo
2.5400°fo
2.5514%
2.5639%
(Continued)
Pubfic Sector Advisors
09-1012
Interest Netlnterest True Interest
Bidder Rates Price Cost Rate
UBS FINANCIAL SERVICES
WELLS FARGO BROKERAGE
SERViCES, LLC
MORGAN KEEGAN & COMPANY, INC.
2.00% 2010-2012
225°/a 2013
2.75% 2014
3.25% 2D15
2.00% 2010-2011
2.50% 2Q12-2013
3.00°/a 2014
3.25% 2015
2.00% 2010-2012
2.25°k 2013
2.85% 2014
3.15% 2015
9.00% 2010
1.50% 2017
2.00% 2012
2.4p% 2013
3.00% 2014
325% 2015
$8,831,001.75
$8,875,489.15
$8,824,656.50
$612,091.17 2.5882°/a
$618,646.06 2.6067%
$627,307.92 2.6288%
FTN FINANCiAL CAPITAL MARKETS
STIFEL, NICOLAUS & COMPANY,
dNCORPORATED
$8,802,070.65 $653,668.97 2.7683%
REOFFERING SCHEDULE OF THE PURCHASER
Rate
3.10%
3.10%
3.10%
3.10%
3.10%
3.10%
Year
2010
2011
2012
2013
2014
2015
Yield
0.50%
1.15°k
1.75%
225%
2.85%
Par
BBI: 4.33%
Average Maturity: 2.671 Years
' Subsequent fo bid opening, the issue size decreased from $8, 845, 000 to $8, 655, 000.
09-1012
� Springsted
$21,510,000'
CITY OF SAINT PAUL, MINNESOTA
Springsted lncorporated
380 Jackson Street, Suite 300
Saint Paui, MN 551D1-2887
Tel: 651-223-3W�
Fa�c: 651-223-3002
Email: advisorseo springsted.com
mvwspringsted.com
GENERAL OBLIGATION TAX INCREMENT REFUNDtNG BONDS, SERIES 2�09G
(BOOK ENTRY ONLY)
AWARD:
SALE:
SeQtember 16, 2009 Moody's Rating: Aa2
Standard & Poor's Rating: AAA
Interest Netinterest True Interest
Bidder Rates Price Cost Rate
BMO CAPITAL MARKETS GKST INC.
CITIGROUP GLOBAL MARKETS, iNC.
CABRERA CAPITAL MARKETS, LLC
J.P. MORGAN SECURITIES INC.
ROBERT W. BAIRD & COMPANY,
INCORPORATED
FIDEUTY CAPiTAL MARKETS SERVICES
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
DAVENPORT & COMPANY LLC
LOOP CAPITAL MARKETS, LLC
C.L. KING & ASSOCIATES
OPPENHEIMER & CO. INC.
SAMCO CAPITAL MARKETS, {NC.
KILDARE CAPITAL
EDWARD D. JONES & COMPANY
4.00°fo 2015-2018
3.00°l0 2019
3.125°/a 2020-2021
3.5�% 2022-2025
4.00°l0 2015-2025
3.�0°fo 2015-2017
4.00% 2018-2019
3.00% 2020
4.00°!0 2021-2025
$22,187,882.45
$22,959,719.76
$7,426,9t3.28 3.1419%
$7,816,46Q.24 3.2321 %
$22,497,SQ3.35 $7,507,454.15 3.2593%
CRONIN 8 COMPANY, INC. 2.50% 2015-2016 $22,259,564.69 $7,932,428.85 3.3291%
WELLS FARGO BftOKERAGE 3.00°!0 2017-2018
SERVICES, LlC 4.00% 2019-2023
WELLS FARGO ADVISORS 3.75% 2024
RBC CAPITAL MARKETS CORPORATION 4.00% 2025
UBS FINANCIAL SERVICES
MORGAN STANLEY & CO. INC.
BMO CAPITAL MARKETS GKST 1NC.
CITIGROUP GLOBAL MARKETS, INC.
CABRERA CAPITAL MARKE7S, LLC
2.5Q% 2015
3.00°Io 2016
325°!0 2017-2018
3.50% 2019
4.00% 2020-2025
$22,357,725.25 $7,955,365.08 3.3311%
(Continued)
Pubiic Sector Advisors
os-ioiz
tnterest Net Interest True lnteres!
Bidder Rates Price Cost Rate
HUTCHINSON, SHOCKEY, ERLEY 8
COMPANY
PIPER JAFFRAY & CO.
BB&T CAPITAL MARKETS
3.00% 2015-2016
5.00°h 2017
4.00% 2018-2023
4.50% 2024-2025
3.00°/a 2015-2016
5.00% 2017-2018
4.00% 2019-2025
4.00% 2015-2019
5.00% 2020-2025
$23,Oi4,466.84
$22,834,125.70
$8,100,451.80
$23,950,586.29 $8,548,359.54
$8,111,603.16 3.3425%
REOFFERING SCHEDULE OF THE PURCHASER
Rate
4.00%
4,00%
4.00%
4.00%
3.00%
3.125%
3.125%
3.50%
3.50%
3.50%
3.50%
Year
2015
2016
2Q17
2018
2019
2020
2021
2022
2023
2024
2025
Yield
1.97%
220%
2.45%
2.68%
2.84%
2.96%
3.08%
3.18°/a
3.289'0
3.375%
3.47%
3.3643°!0
3.4305%
861: 4.33%
Average Maturity: 10.804 Years
* Subsequent fo bid opening, the issue size decreased from $29,510,000 to $20,695,000.
09-1ai2
� Springsted
$14,400,000`
Spri�gstedlncorporated
38D Jackson SVeei, Suite 300
SainiPauV,MN 55101-2887
Tel: 651-2233000
Fax: 651-2233DD2
Email: advisors@springsied.com
wwwspringsted.com
C1TY OF SAINT PAUL, MINNESOTA
GENERAL OBLIGATION CAPITAL NOTES, SERIES 2009P
�BOOK ENTRY ONLI�
AWARD;
SALE:
September 16, 2009 Moody's Rating: Aa2
Standard & Poor's Rating: AAA
Interest Net Interest True Interest
Bidder Rates Price Cost Rate
BMO CAPITAL MARKETS GKST INC.
CIT4GROUP GLOBAL MARKETS, INC.
CABRERA CAPITAL MARKETS, LLC
J.P. MORGAN SECURITIES INC.
ROBERT W. BAIRD 8 COMPANY,
INCORPORATED
FIDEL4TY CAPITAL MARKETS SERVICES
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
DAVENPORT & COMPANY LLC
LOOP CAPITAL MARKETS, LLC
C.L. KING & ASSOCIATES
OPPENHEIMER & CO. INC.
SAMCO CAPITAL MARKETS, INC.
KILDARE CAPITAL
EDWARD D. JONES & COMPAfVY
PIPER JAFFRAY & CO.
2.00°!0 2011-2014
2.25% 2015
2.50% 2016
2.625°Jo 2017
2.75°!0 201$
3.00% 2019
4.00% 2011-2019
2.00% 2011-2013
2.50°l0 2014
3.00°fo 2015-2016
4.00% 2017-2019
4.00% 2071-2019
$14,566,973.60 $2,034,020.46
$15,746,975.65 $2,15A,824.35
$15,173,387.79 $2,137,945.96
$15,728,366.50 $2,'173,433.50
2.2952°10
2.3181 %
2.3392%
2.3399%
WELLS FARGO BROKERAGE 2.00% 2011-2Q13 $14,713,161.7Q $2,124,260.80 2.3784%
SERVICES, LLC 2.50°l0 2014-2016
UBS FINANCIAL SERVICES 3.00% 2017-2018
CRONIN & COMPANY, INC. 3.50% 2019
RBC CAPITAI MARKETS CORPORATION
(Continued)
Publit Settor Advisors
BMO CAPITAL MARKETS GKST INC.
CiTIGROUP GLOBAL MARKETS, INC.
CABRERA CAPITAL MARKETS, LLG
09-1012
lnterest Net Interest True Interest
Bidder Rates Price Cost Rate
BBBT CAPtTAL MARKETS
3.00% 2011-2013
325% 2014
3.50% 2015
4.00% 2016-20t9
$15,434,652.65 $2,228,035.47 2.4198%
REOFFERING SCHEDULE OF THE PURCHASER
Rate
Year
Yield
2.00%
2.00%
2.00%
2.00%
2.25%
2.50%
2.625°k
2.75%
3.00%
2011
2092
2013
2074
2015
2016
2017
2018
2019
0.70%
1.07%
1.40%
1.72%
1.979'0
2.20%
2.45%
2.68%
2.84%
BBI: 4.339'0
Average Maturity: 6.130 Years
' Subsequent to bid opening, the issue size decreased from $14, 400, 000 to $14, 235, 000.
09-1012
Summary:
St. Paul, Minnesota; General Obligation
USS2757 mil GO tax incre rfdg bnds ser 2009G dtd 10(19/2009 tlue OZ(07(2025
Te�m
A.4A(Sta61e New
US$1A A md GO cap ms ser 2009F dftl 70i0912009 due tOJD712019
AAA1Stable New
US$8.845 mil taxable GO tax mcre rfdg 6nds ser 2W9H dtd 1 �J19/2�09 due 02/01/2015
Cong Term Rating AAA1Stable New
St Paul
St Paul Port Auth, Minnesota
St Paul, Minnesota
St Paul Port Auth (St Paul{ 60
AAA(Stable Affumeci
UnenhancedRatmg AAA(SPUR�(Sta6fe Affirmed
Many issues are enhanced by bond msurence
Rationale
In Standaxd & Poox's Racing Seivices' opinion, t�ie 'AAA' long-term racing on Sc Pau(, Mi�n.'s general obligation
(GO) capital note sexies 2009F, GO tax increment refunding bonds series 2009G, and taxable GO tax inerement
refunding bonds series 2009H reflecxs the citq's
• Deep and diverse local economy, w6ich participaces m the even bcoader Minneapolis-Sc. Pau( (Twin Gittes)
metropolitan scaciscical area (MSA) economy;
• Stiong management, with the city takmg a strong stand co keep hndget to aemal pecformance more aligned with
and backed by the maintenance of a 1S% fund balance of next year's budget;
• Successful redevelopmznt efforts, which have helped spur downtown St. Paul's recovery; and
• Moderace debc burden.
The 'AAA' longterm rating and Standaid & Poox's underlying ranng (SPUR) on the city's GO bonds have been
affirmed.
The seeies 20Q9F capital notes are general obligations of the city for which the city has pledged ics full faith and
credit and powei to levy direct general ad valorem xaxes. The cixy will use proceeds to finance the acquisition of
eapital equipment.
The series 2009G GO tax increment refunding bonds and sedes 2009H caxa6le GO tax incremenc eefunding bonds
wi11 be general obligarions of rhe city for which it �vill pledge i[s full faith and credit and powex to levy direet general
ad valorem taxes. In addition, the St. Paul Housing and Redevelopmenc Authority will also pledge tax increment
revenue derived from the Biock 39JArena Redevelopmen� Tax Ineremenc Financing District and �et parking
revenues from rhe B1ock 39 parking ramp. The city will use the proceeds ro refund its GO [ax increment bonds
S�andard & Poor's RatingsDi�ect � September 14, 2009 2
Smndar0&POOfsAlinghtsraserved NorepnntotdisseminaeanwithoutS&P'spermission SeeTermsofUse[DisClaimeronthelastpage 7.+&:S2f30P2�"5°e
Summary: St. Paul, Minnesota; General Obligation
series 1998A and serles 199$B. Each year's col(ections oY taxes and tax increment revenues, if collected in full, wilI
be sufficient xo pay 105% of the interest due on Aug. 1 of the collettion year and the principal and interest due on
Feb. 1 of the followi� year,
St. Paul (populacion: 286,620) continues to benefic from growth in the Twin Cities area; downtown St. Paul,
meanwhile, continues to be the scene of redevelopment. The ciry is the seat for Ramsey County ('AAA' GO rating).
Residents have employment opportunicies throughout the MSA and counry. The MSA's unemploymenc rate
averaged 7.9% xhrough July 2009, on par with che state's 7.S% rate. The tax base condnues to grow as Sc. Paul has
successfully developed public and private partnerships throughout the city to encourage residential, commercial, and
industrial redeve7opment. The tax base is diverse, with the 101eading taxpayers accoundng for just 6.4% of tota]
assessed value. The assessor's indicaced market value grew at an average annual rate of 3.2% between 2005 and
2009 to $24.053 billion, transladng to, in our opinion a very strong $53,922. We consider the city's wealth and
income levels to be average, as demonstrated by median household effective buying income at 80.8% of the scate
and 89.0% of the narional levels.
The ciry's financial position has remained strong, despire cuts in state ]ocal governmenc aid, no property tax
increases since 1992, and the maintenance of a consiscent level of services for residents. As a result, the cixy lowered
Sts fund balance to $27.2 million in fiscal 2005 {] 6.9% of expenditures) from $43J million (26.5%) in fiscal 2001.
Beginning x�ith fisca12006, che city changed its budgeting scrategy such that budgex-co-actual results will be more
closely aligned than in rhe past. With chis approach, che city showed a$3.0 million general fund surplas in fiscal
2006 and an ending unreserved general fund balance of $27.0 million, or, in our opinion, a very sttong 15.7% of
expendirures. Audited figures for fiscal Z067 showed a betterthan-expected $4.7 million surplus in the general fund
for an ending unreserved fund balance of $31J million, o, in our opinion, a very strong 17.9% of expenditures.
Audiced results for fiscal 2008 show the ciry drawing on reserves as a result of a year-end state unallounent of $S.9
million, reducing the unreserved fund balance to 15.6% of e�sendixures. The city projected its original fisca12009
budget ro be rough(y $2.6 million short of its adopted 15% of expenditure reserve policy, but made budgexary
reductions equa] to rhe shortfall in order to mainxain the fund balance in line wixh the board poliry. The city
projects ending fiscal 2009 with an unreserved general fund balance of $32.29 million, or 15.4% of expenditures.
St. Paul's management practices have been assigned a Financial Management Assessment (FVIA) of "strong". The
strong assessment indicaces that management practices are strong, well embedded, and likely sustainable.
We consider che ciry's overall net debt burden, which includes overlapping debt and debt paid from nongeneral
obligation sources, moderate at $2,115, buc low ac 2.5% of market value. The city's GO debt is suppotted by a tax
[evy {50%), special assessmencs, (23%), tax increments (20%), and water and sewer revenues (7%). The city's debt
service carrying charge has historically been low. Amortization of GO debt is average, wich about 53% rexired in 10
years and nearly 100% in 20 years.
Outlook
The stable outlook reflects Standard & Poor's expectation that the city's economic stability will continue, as rvill
progress in cedeveloping the downtown St. Paul area. The outlook also reflects our expectation chat the city will be
able to maintain ics strong financial position, despite the reductions in state local government aid and the new
budgeting strategy.
www.standardandpoors.com/ratingsdirect 3
StantlazB & PooYS Nl rigMs rv_aaved. No reprint ur tGsseminafion wiMOUt 5&P's Derm�ssion. SeeTerms of Use/�isGaimer on Ihe Wst pagz 746452 � 3�0211Fi94
09-1012
�.
� �L �
�
Jlipad�PS Eorsst�rs :isrrlea
New Issue: St. Paul (City o� MN
Global Credit Research
New Issue
9 SEP 2009
MOODY'S ASSIGNS Aa2 RATING TO ST. PAUL'S (MN) GO CAPITAL NOTES, SERIES 2009F, GO TAX INCREMENT
REFUNDING BONDS, SERIES 2009G, AND TAXABLE GO TAX INCREMENT REFUNDING BONDS, SERIES 2009H
CIT�' NAS $225.4 MILLION OF OUTSTANDING GO QEBT, INCLUDING CURRENT OFFERINGS
Municipality
MN
Moody's Rating
ISSUE
General Obligation Capital Notes, Series 2009F
Sale Amount
$14,400,000
Expected Sale Date
Rating Description
09J16/09
General Obligation
General Obligation Tax Increment Refunding Bonds, Series 2009G
Sale Amount
$21,510,000
Ezpected Sale Date
Rating Description
09/16/09
General Obligation
RATING
Aa2
Aa2
Taxable General Obligation Tax Increment Refunding Bonds, Series 2009H Aa2
Sale Amount
$8,845,000
Expected Sale Date
Rating Description
Opinion
09/16/09
General Obligation
NEW YORK, Sep 9, 2009 -- Moody's Investors Service has assigned a Aa2 rating with a stable outlook to the City
of St. Paul's (MN) $14.4 million General Obligation Capital Notes, Series 2009F, $21.51 million General Obligation
Tvc Increment Refunding Bonds, Series 20Q96, and $8.845 m+llion Taxable General Obligation Ta�c Increment
Refunding Bonds, Series 2009H. Concurrently, Moody's has affirmed the Aa2 rating on previously issued debt. The
city has a total of $225.394 million of General Obligation outstanding, inGuding the current sales. The bonds are
secured by the city's general obligation unlimited tax pledge. Proceeds of the Series 2009F notes will finance the
acquisition and impiementation of a new financial management system and the Series 2009G and Series 2009H
bonds will refinance 1998 bonds for net present value savings and restructure to level debt service. The Aa2 rating
reflects the city's sizable tax base anchored by the state capital and continued redevelopment resuiting in improved
housing stock and commercial diversification, with moderate impact from the housing downturn and increased rate
of foreclosures; satisfactory though narrowed financial operations characterized by revenue pressures; and
favorable overall debt profile. Moody's stable outlook reflects the stability of the tax base as part of the relatively
strong Twin Cities economy, the expectation that financial operations have stabilized as planned after several years
of financial challenges and declining reserves, and our expectation that the city's debt profile will remain favorable.
Credit Strengths:
* State capital and part of the strong Twin Cities economy which continues to experience regional growth.
* Residential growth as evidenced by recent net gains in housing units and population gains in Census 2000.
' Healthy financial position supported by city's commitment to maintaining minimum fund balance policy.
' Attainment of structural operating pertormance and expected stabilization of General Fund reserve levels.
* Moderate debt profile
Credit Challenges:
' Continued expected revenue challenges, exacerbated by state budgetary pressures resulting in unpredictable and
deciining state aid.
' Narrowed, but satisfactory, financial liquidity following planned draw downs through 2005
' Socio-economic indices that have kept pace with national levels, but slipped slightly compared to state levels.
' Local manifestation of national housing challenges with increased foreclosure and vacant housing units.
STATE CAPITAL AND ONGOING RESIDENTIAL REDEVELOPMENT PROVIDE STABLE ECONOMIC BASE
St. Paul is the state's capital and second largest city. Although generally a mature urban city, redevelopment and
new residential development have resulted in relatively robust growth trends that have moderated in light of the
recent housing downtum. Moody's expects these more moderate trends to continue in the near-term as the city
fights to address foreGosure concerns. Full market valuation, at $252 billion in 2009, reflected a slight decline of
1.4°/a from the prior year, largely due to modest growth and the sales ratio determined by the State DepaRment of
Revenue. The five year average annual growth rate is a moderate 4.7%, driven by healthy growth prior to 2008. The
value of building permits also fell in 2008, reflecting just 63% of total permit values in 2007. While specific
redevelopment projects do continue, overaU growth is expected to remain modest until new construction activity and
appreciation trends return. Population grew by 5% from 1990 to 2000, evidencing a shift in the prior trend of
population out-migration or stagnaYion, however 2005 census estimates show a 42% decline since 2000.
As the state capital, the economic base is characterized by a sizable government sector with a significant heafth
care and education presence. Over 70,000 higher education students provide an additional measure of economic
stability. The city has continued to redevelop its downtown, adhering to a long-tertn strategy to revitalize the city's
09-1012
office, entertainment and culturai facilities, which have anchored the central business districYs redevelopment
efforts, while an aggressive housing effort complimented the growth with residential development. The riverfront
remains an asset that the city is continuing to tap. Favorably, the St. Paul's Ford pla�t closure has been delayed to
2011 in accordance with a recently settled union contract. However, following the previously announced closure,
city officials formulated a redevelopment plan and remains prepared to facilitate redevelopment as the opportunity
becomes available. Although the Ford plant is among the city's top taxpayers, St. Paul's tax base is very diverse,
and Moody's does not expect property tax revenues to be impacted.
Unempioyment increased to 8.4% as of July 2009, which is more favorabie than state and national rates of 7.8%
and 9.7%, respectively, for the same time period. Despite evidence of a slowed local economy, Moody's expects the
city's aggressive commercial and residential redevelopment efforts to contribute to economic expansion going
forward. The city notes that property foreclosures have gone up dramatically since 2005, increasing annually and
reaching a peak of 2,289 in 2008, compared to 635 in 2005. The increased foreclosures only account for a
manageabie 2% of the total housing stock. In addition to efforts at the state and local level to mitigate this growing
problem, the city has also begun aggressive efforts to counsel residents undergoing foreclosure, reaching 915
families since October 2008, bringing 276 cases to resolution to date. Moody's believes that the city's proactive
efforts in addressing these issues will help to offset any continued foreclosure pressures as the economic downturn
continues.
DESPITE UNEXPECTED REVENUE PRESSURES, STRUCTURAL BALANCE AND MAINTENANCE OF FUND
BALANCE POLICIES EXPECTED
Following five years of increasing General Fund operating deficits (FY01 - FY05), FY06 results reversed that trend,
with a$1.6 million operating surplus. Including other one-time revenue sources, the General Fund balance
increased by $3 million to $30 million, or a satisfactory 17.4% of FY06 General Fund revenues. Favorable variances
resulted in a$4.7 miilion operating surplus in FY07 and were aiso projected for FY08. However, following the state's
unallocation of local government aid just days prior to the end of the city's FY08 year-end, a nearly $3 million deficit
is expected to be realized. Given that the state unallotment for the city was $5.7 million, the more modest deficit
reflects other positive variances in budgetary results, reflecting the city's overall conservative budgeting.
State aid comprises a large, but declining, component of operating revenues, with intergovernmental aid falling from
51 %(FY02) to 28.6% (FY07) of operating revenues. Moody's believes that in the long-run, the city's declining
reliance on state aid will help insulate the city from declining aid or mid-year reductions; however, the city will
continue to be challenged to find growth in alternate revenues sources. Property tax levy growth for most Minnesota
cities and counties is limited to 3.9% annually, with exemptions for certain expenditures. However, city officials do
not expect property tax levy limits to adversely impact financial operations. Favorably, the ability to raise the
property levy and the demonstrated will to exercise that ability following several years of flat property taxes will give
the city much more flexibility to offset this revenue loss.
Moodys believes that the citys strong financial management is reflected in the fiscal discipline it has demonstrated
to regain structural balance as weil as adhere to its fiscal policies. The city has achieved a structurally balanced
budget as of FY09, one year ahead of the mayor's original goal. The struggle to regain structural balance has been
the result of considerable effort and cooperation among city officials, including levy increases following years of
minimal levy growth. Further, as the city realized that the unexpected draw on reserves at the end of FY08 would
result in a FY09 year end General Fund balance below its 15% policy, officials made one-time adjustments to the
budget in order to maintain adequate reserves by year-end. To that end, City Council passed a budget resolution
May 6, 2009, immediately replenishing the FY08 year-end draws to bring General Fund reserves back in line with
the city's 15% policy. Moody's believes that the city's demonstrated discipline and immediate reaction to unexpected
rayarn�a nrocg�irc¢ �yill rcmairi �r,ritiCBl 25 fF1° S+?±° CC.^.t!.^.L°S ±^ f2C° SL�C�^°t8 ressures. The cit s abilit t0
� r. -- o-. �`1 P Y Y
maintain structural balance in the long-run is important for the city's overall credit profile.
MODERATED DEBT PROFILE EXPECTED TO REMAIN MANAGEABLE
St. Paul's debt burden, currently an above average 3.6%, is manageable given expected continued tax base growth
(albeit more moderate growth trends) and the use of special assessments and tax increment revenue to repay
approximately 25% of the city's direct debt. The debt burden has declined from previous highs, 8% as recenUy as
1998, due largely to substantial market value increases, although limiting debt issuance has also been an important
component to this trend. Debt is amortized rapidly; with approximately 73% retired in 10 years. The city expects to
issue debt in a pattern consistent with the past several years, with approximately $30 million issued annually to fund
various public improvements. The city's capital program is supplemented by the city's one-half cent sales tax that is
used to support debt associated with cultural facilities (10%), the RiverCenter (40%) and the city's HRA /
Neighborhood program (50%).
The city has one outstanding issue of variable rate debt, issued May 1, 2009 as a result of a forward swap
agreement entered into in 2007 to allow for interest rate savings upon refunding its Series 7999 bonds at its call
date. The city's $65.455 million Sales Tax Revenue Refunding Bonds, Series 2009 refunded its parity 1999 bonds
to variable rate demand bonds, backed by a direct pay letter of credit from US Bank (Moody's issuer rating Aa1).
Concurrently, the forward starting swap also became effective, and is composed of two swap agreements with Piper
Jaffray and Royal Bank of Canada (Moodys issuer rating Aa3). Each swap hedges approximately $33 million,
respectively, and are synthetic fixed rate swaps. The city pays each counterparty 523% and receives one-month
LIBOR. The Piper Jaffi'ay swap is based on counterparty enhancement from Morgan Stanley (Moody's issuer rating
A1 }. The city has a one-way option to terminate on both swaps and collateral posting thresholds that would not
require the city to post collateral unless the city's sales tax revenue bond rating falis into the A range. Moody's does
not have an underlying rating on the city's sales tax revenue debt.
Outlook
Moody's stable ouUook reflects our expectation that the city will continue to benefrt from its stable economic base as
the state capital and part of the strong Twin Cities economy, despite the recent economic downturn. Further,
despite uncertain revenue streams due to budgetary pressures at the state level, city officials have demonstrated
strong fiscal discipline, which should stabilize its financial position through this current cycle. Additionally, the city's
current and expected debt profile remains favorable.
What could change the rating - UP
- Attainment and maintenance of structural balance over the long-term.
- Economic growth within the city and the region continue to bolster revenue potential and reverse vacancy trends.
What could change the rating - DOWN
- Inability to maintain structural balance and offset state aid revenue losses.
- Persistent economic challenges that would lead to revenue pressures or increased expenditure demands.
- Revenue raising challenges due to general economic conditions, resufting in continued stagnation of stffie aid and
limiting the ability to further leverage the tax base.
KEY STATISTICS:
2005 population: 275,150
Change in population from 1990 to 2000: 5.5%
2008 full valuation: $25.2 billion
Average annual full value growth (5 years): 4.7%
09-1012
Full value per capita: $90,880
Unemployment (7/09): 8.4%
Debt burden: 3.6% (2.6%, adjusted for sales tax and parking revenue supported debt)
Fiscal 2008 General Fund balance: $32 miliion (17.4% of General Fund revenues)
Post-sale GO debt outstanding: $225.394 million
The principal methodology used in this rating action was "Local Government General Obligation and Related
Ratings," which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Index of
Special Reports - U.S. Public Finance. Other methodologies and factors that may have been considered in the
process of rating this issuer can also be found in the Credit Policy & Methodologies directory.
The last rating action and report with respect to the City of St. Paul was published on May 18, 2009 when the Aa2
rating and stable outlook on the city's outstanding general obligation unlimited tax debt was affirmed.
Analysts
Henrietta Chang
Analyst
Public Finance Group
Moody's Investors Service
Rachel Cortez
Backup Analyst
Public Finance Group
Moody's Investors Service
Contacts
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC: S(MIS) CURRENT OPINIONS OF THE RELATIVE
FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS
DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL
OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT.
CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK,
MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR
HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT
RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT
RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR.
MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR
WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR
PURCHASE, HOLDING, OR SALE.
O Copyright 2009, Moody's investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc.
(together, "MOODY'S"). All rights reserved.