HomeMy WebLinkAbout2018A Day of SaleEHL-ERS
LEADERS IN PUBLIC FINANCE
June 19, 2018
Sale Day Report for
City of Gem Lake, Minnesota
$660,000 General Obligation Improvement Bonds,
Series 2018A
SM I N N ESOTA
Prepared by
Todd Hagen, CIPMA
VP/Senior Municipal Advisor
Rebecca Kurtz, CIPMA
VP/Senior Municipal Advisor
and
Chris Mickelson,
Financial Specialist
W_W—LA -- — 1-800-552-1171 i :�er�ti.i.hl�r; inc.cum
Sale Day Report — June 19, 2018
City of Gem Lake, Minnesota
$660,000 General Obligation Improvement Bonds, Series 2018A
Purpose:
Rating:
Number of Bids:
Low Bidder:
Winning Bid:
(TIC as bid)
Notes:
Closing Date:
For the purpose of financing the construction of the 2018
Scheuneman Road Reconstruction Project in the City.
MN Credit Enhancement Rating: S&P Global Ratings "AA+"
1
Northland Securities, Inc., Minneapolis, Minnesota
Winning Bid
3.7254%
Summary of Results:
Results of Sale
Principal Amount:
$660,000
Underwriter's Discount:
$23,760
Reoffering Premium:
$19,227
True Interest Cost:
3.7265%
Capitalized Interest:
$12,631
Costs of Issuance:
$29,002
Yield:
2.10%-3.20%
Total Net P&I
1 $869,750
City Council Action:
Attachments
The size of the bond issue was reduced by $5,000 from the projected
amount due to a reduction of underwriter's discount and costs of
issuance.
July 12, 2018
Adopt a resolution awarding the sale of $660,000 General Obligation
Improvement Bonds, Series 2018A.
• Bid Tabulation
• Sources and Uses of Funds
• Updated Debt Service Schedules
• Rating Report
• BBI Graph
• Bond Resolution (Distributed in City Council Packets)
Sale Day Report
City of Gem Lake, Minnesota
June 19, 2018
19 EHLERS
LEADERS IN PUBLIC FINANCE
BID TABULATION
$666,000* General Obligation Improvement Bonds, Series 2018A
City of Gem Lake, Minnesota
SALE: June 19, 2018
AWARD: NORTHLAND SECURITIES, INC.
MN Credit Enhancement Rating: S&P Global Ratings "AA+" BBI: 3.92%
Bank Qualified
NET TRUE
MATURITY REOFFERING INTEREST INTEREST
NAME OF BIDDER (February 1) RATE YIELD PRICE COST _ RATE
NORTHLAND SECURITIES, INC.
Minneapolis, Minnesota
United Banker's Bank
D.A. Davidson
2020
3.000%
2.100%
2021
3.000%
2.200%
2022'
3.000%
3.000%
20231
3.000%
3.000%
20241
3.000%
3.000%
20251
3.000%
3.000%
2026 '
3.000%
3.000%
2027'
3.000%
3.000%
20281
3.000%
3.000%
20292
4.000%
3.200%
20302
4.000%
3.200%
20312
4.000%
3.200%
20322
4.000%
3.200%
20332
4.000%
3.200%
20342
4.000%
3.200%
Subsequent to bid opening the issue size was decreased to $660,000.
Adjusted Price - $655,467.15 Adjusted Net Interest Cost - $226,913.83
1 $290,000 Term Bond due 2028 with mandatory redemption in 2022-2027.
2 $305,000 Term Bond due 2034 with mandatory redemption in 2029-2033.
$659,859.90 $224,048.71 3.7254%
Adjusted TIC - 3.7265%
1-800-552-1171 1 wwa ,ehlers inc.c��m
City of Gem Lake, Minnesota
$660,000 General Obligation Improvement Bonds, Series 2018A
Issue Summary
Total Issue Sources And Uses
Dated 07/12/2018 1 Delivered 07/1212018
Improvement Revenue
Portion Portion Issue
(429) (429) Summary
Sources Of Funds
Par Amount of Bonds
S590,00U.U0
S70,000.00
S660 U00 00
Reoffering Premium
17,345.55
1.881 60
19,227 15
Total Sources
$607,345.55
$71,881.60
$679.227.15
Uses Of Funds
Total Underwriter's Discount (3.600%)
21,240.00
2,520.00
23,760.00
Costs of Issuance
25,926.03
3,075.97
29,002 00
Deposit to Capitalized Interest (CIF) Fund
11304.31
1,326.67
12.630.98
Deposit to Project Construction Fund
548,875.21
64,958.96
613,834 17
Total Uses $607,345.55 $71,881.60 $679,227.15
Series 2018A GO Imp Bonds I Issue Summary 1 6/19/2018 1 10:39 AM
EHLERS
LEADERS IN PUBLIC FINANCE
City of Gem Lake, Minnesota
$660,000 General Obligation Improvement Bonds, Series 2018A
Issue Summary
Net Debt Service Schedule
Net New
Fiscal
Date
Principal
Coupon
Interest
Total P+I CIF
D/S
Total
07/12/2018
-
-
02/01/2019
12,630.98
12,630.98 (12,630.98)
-
08/01/2019
-
11,425.00
11,425.00 -
11,425.00
-
02/01/2020
30,000.00
3.000%
11,425.00
41,425.00 -
41,425.00
52,850.00
08/01/2020
-
-
10,975.00
10,975.00
10,975.00
-
02/01/2021
35,000.00
3.000%
10,975.00
45,975.00
45,975.00
56,950.00
08/01/2021
-
-
10,450.00
10,450.00 -
10,450.00
-
02/01/2022
40,000.00
3.000%
10,450.00
50,450.00 -
50,450.00
60,900.00
08/01/2022
-
-
9,850.00
9,850.00 -
9,850.00
-
02/01/2023
40 000.00
3.000%
9,950.00
49,850.00
49,950.00
59,700.00
08/01/2023
-
-
9,250.00
9,250.00 -
9,250.00
-
02/01/2024
40,000.00
3.000%
9,250.00
49,250.00
49,250.00
58,500.00
08/01/2024
-
8,650.00
8,650.00 -
8,650.00
-
02/01/2025
40,000.00
3.000%
8,650.00
48,650.00 -
48,650.00
57,300.00
08/01/2025
-
-
8,050.00
8,05000 -
8,050.00
-
02/01R026
40,000.00
3.000%
8,050.00
48,050.00
48,050.00
56,100.00
08/01/2026
-
-
7,450.00
7,450.00
7,450.00
-
02/01/2027
45,000.00
3.000%
7,450.00
52,450.00 -
52,450.00
59,900.00
08/01/2027
-
-
6,775.00
6,775.00 -
6,775.00
-
02/01/2028
45,000.00
3.000%
6,775.00
51,775.00 -
51,775.00
59.550.00
08/01/2028
-
-
6,100.00
6,100.00 -
6,100.00
-
02/01/2029
45,000.00
4.000%
6,100.00
51,100.00 -
51,100.00
57,200.00
08/01/2029
-
-
5,200.00
5,200.00 -
5,200.00
-
02/01/2030
50,000.00
4.000%
5,200.00
55,200.00 -
55,200.00
60,400.00
08/01/2030
-
-
4,200.00
4,200.00 -
4.200.00
-
02/01/2031
50.000.00
4.000%
4,200.00
54,200.00 -
54,200.00
58,400.00
08/01/2031
-
-
3,200.00
3,200.00 -
3,200.00
-
02/01/2032
50,000.00
4.000%
3,200.00
53,200.00 -
53,200.00
56,400.00
08/01/2032
-
2,200.00
2,200.00 -
2,200.00
-
02/01/2033
55,000.00
4.000%
2,200.00
57,200.00 -
57,200.00
59.400.00
08/01/2033
1,100.00
1,100.00 -
1,100.00
-
02/01/2034
55,000.00
4.000%
1.100.00
56,100.00 -
56,100.00
57,20000
Total
$660,000.00
-
$222,380.98
$882,380.98 (12,630.98)
$869,750.00
-
Series 2018A GO Imp Bonds I Issue Summary 1 6/19/2018 1 10:39 AM
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LEADERS IN PUBLIC FINANCE
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City of Gem Lake, Minnesota
$590,000 General Obligation Improvement Bonds, Series 2018A
Improvement Portion (429)
Net Debt Service Schedule
Net New
Fiscal
Date
Principal
Coupon
Interest
Total P+I CIF
D/S
Total
07/12/2018
-
-
02/01/2019
11,304.31
11,304.31 (11,304.31)
-
08/01/2019
-
-
10,225 00
10,225.00
10,225.00
-
02/01/2020
30,000.00
3.000%
10,225 00
40,225.00
40,225.00
50,450.00
08/01/2020
-
9,775.00
9,775.00 -
9,775,00
02/01/2021
30,000.00
3.000°k
9,775.00
39,775.00
39,775.00
49,550.00
08/01/2021
-
-
9,325.00
9,325.00 -
9,325.00
02/01/2022
35,000.00
3 000%
9,325.00
44,325.00 -
44,325.00
53,650.00
08/01/2022
-
-
8,800.00
8,800.00 -
8,800.00
-
02/01/2023
35,000 00
3.000%
8,800m
43,800.00 -
43,800.00
52,600.00
08/012023
-
8,275.00
8,275.00 -
8,275.00
-
02/01/2024
35,000.00
3.000%
8,275.00
43,275.00 -
43,275.00
51,550.00
08/01/2024
-
-
7,750.00
7,750.00 -
7,750.00
-
02/01/2025
35,000.00
3.000%
7,750.00
42,750.00 -
42,750.00
50,500.00
08/01 /2025
-
7,225-00
7.225.00 -
7.225.00
-
02/01/2026
35.000.00
3.000%
7,225.00
42,225.00 -
42,225.00
49,450.00
08/01/2026
-
6,700.00
6,700.00
6,700.00
02/01/2027
40,000.00
3.000%
6,700.00
46,700.00 -
46,700.00
53,400 00
08/01/2027
-
-
6,100.00
6,100.00 -
6,100.00
02/01/2028
40000.00
3.000%
6,100.00
46,100.00
46.100.00
52,200.00
08/01/2028
-
-
5,500.00
5,500.00 -
5,500.00
-
02/01/2029
40,000.00
4.000%
5,500.00
45,500.00 -
45,500.00
51,000.00
08/01/2029
-
-
4,700.00
4,700.00
4,70000
-
02/01/2030
45,000.00
4.000%
4,700.00
49,700.00
49,700 00
54,400.00
08/01/2030
-
-
3,900.00
3,800.00
3,800.00
02/01/2031
45,000.00
4.000%
3,800.00
48,800.00
48,800.00
52,600.00
08/01/2031
-
-
2,900.00
2,900.00 -
2,900.00
-
02/01/2032
45,000.00
4.000%
2,900.00
47,900.00 -
47,900.00
50,800.00
08/01/2032
-
-
2,000.00
2,000.00 -
2,000.00
02/01/2033
50000.00
4.000%
2.000.00
52.000.00
52,000.00
54,000.00
08/01/2033
-
-
1,000.00
1,000.00
1,000.00
02/01/2034
50,000.00
4.000%
1,000.00
51,000 00
51,000.00
52,000.00
Total $590,000.00 - $199,454.31 $789,454.31 (11,304.31) $778,150.00
Series 201BA GO Imp Bonds I Improvement Portion (429) 1 6119/2018 1 10:39 AM
EHLERS
LEADERS IN PUBLIC FINANCE
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City of Gem Lake, Minnesota
$70,000 General Obligation Improvement Bonds, Series 2018A
Revenue Portion (429)
Net Debt Service Schedule
Net New
Fiscal
Date
Principal
Coupon
Interest
Total P+I CIF
D/S
Total
07/12/2018
-
-
-
-
02/01/2019
-
-
1,326.67
1,326.67 (1,326.67)
-
08/01/2019
-
1,200.00
1,200.00
1,200.00
-
02/01/2020
-
-
1,200.00
1,200.00 -
1,200.00
2,400.00
08/01/2020
-
-
1,200.00
1,200.00 -
1,200.00
-
02/01/2021
5,000.00
3.000%
1,200.00
6,200.00 -
6,200.00
7,400.00
08/01/2021
-
-
1,125.00
1,125.00 -
1,125.00
-
02/01/2022
5,000.00
3.000%
1,125.00
6,125.00 -
6,125.00
7,250.00
08/01/2022
-
1,050.00
1,050.00 -
1,050.00
-
02/01/2023
5,000.00
3.000%
1.050,00
6,050.00 -
6.050.00
7,100.00
09/01/2023
-
-
975.00
975.00 -
975.00
-
02/01/2024
5,000.00
3.000%
975.00
5,975.00 -
5,975.00
6,950.00
08/01/2024
-
-
900.00
900.00 -
900.00
-
02/01/2025
5,000.00
3.000%
900.00
5,900.00 -
5,900.00
6,800.00
08/01/2025
-
-
825.00
825.00 -
825.00
-
02/01/2026
5,000.00
3.000%
825.00
5,825.00 -
5,825.00
6,650.00
08/01/2026
-
-
750.00
750.00 -
750.00
-
02/01/2027
5,000.00
3.000%
750.00
5,750.00 -
5,750.00
6,500.00
08/01/2027
-
-
675.00
675.00 -
675.00
-
02/01/2028
5.000.00
3.000%
675.00
5,675.00 -
5,675.00
6,350.00
08/01/2028
-
600.00
600.00 -
600.00
-
02/01/2029
5,000.00
4.000%
600.00
5,600.00 -
5,600.00
6,200.00
08/01 /2029
-
-
500.00
500.00 -
500.00
-
02/01/2030
5,000.00
4.000%
500.00
5,500.00 -
5,500.00
6,000.00
08/01/2030
-
-
400.00
400.00 -
400.00
-
02/01/2031
5,000.00
4.000%
400.00
5,400.00 -
5,400.00
5,800.00
08/01/2031
-
-
300.00
300.00 -
300.00
-
02/01/2032
5,000.00
4.000%
300.00
5,300.00 -
5,300.00
5,600.00
08/01/2032
-
-
200.00
200.00 -
200.00
-
02/01/2033
5,000.00
4.000%
200.00
5,200.00 -
5,200.00
5,400.00
08/01/2033
-
-
100.00
100.00 -
100.00
-
02/01/2034
5,000.00
4.000%
100.00
5,100.00 -
5,10000
5,200 00
Total
$70,000.00
-
$22,926.67
$92,926.67 (1,326.67)
$91,600.00
-
Series 2018A GO Imp Bonds I Revenue Portion (429) 1 6/19/2018 1 10:39 AM
EHLERS_
LEADERS IN PUBLIC FINANCE
City of Gem Lake, Minnesota
$70,000 General Obligation Improvement Bonds, Series 2018A
Revenue Portion (429)
Debt Service Schedule
Net New
105% of
Date
Principal
Coupon
Interest
Total P+I CIF
D/S
Total
02/01/2019
1,326.67
1,326.67 (1,326.67)
-
-
02/01/2020
-
2,400.00
2,400.00
2,400.00
2,520.00
02/01/2021
5,000.00
3.000%
2,400.00
7,400.00
7,400.00
7,770.00
02/01/2022
5,000.00
3.000%
2,250.00
7,250.00
7,250.00
7,612.50
02/01/2023
5,000.00
3.000%
2,100.00
7,100.00 -
7,100.00
7,455.00
02/01/2024
5,000.00
3.000%
1.950.00
6,950.00 -
6,950.00
7,297-50
02/01/2025
5,000.00
3.000%
1,800.00
6,800.00 -
6,800.00
7,140.00
02/01/2026
5,000.00
3.000%
1,650.00
6,650.00 -
6,650.00
6,982.50
02/01/2027
5,000.00
3.000%
1,500.00
6,500.00 -
6,500.00
6,825.00
02/01/2028
5,000.00
3.000%
1,350.00
6.350.00 -
6,350.00
6,667.50
02/01/2029
5,000.00
4.000%
1,200.00
6,200.00 -
6,200.00
6,510.00
02/01/2030
5,000.00
4.000%
1,000.00
6,000.00
6,000.00
6,300.00
02/01/2031
5,000.00
4.000%
800.00
5,800.00
5,800.00
6,090.00
02/01/2032
5,000.00
4.000%
600.00
5,600.00 -
5,600.00
5,880.00
02/01/2033
5.00000
4.000%
400.00
5,400.00
5,400.00
5,670.00
02/01/2034
5,000.00
4.000%
200.00
5,200.00
5,200.00
5.46000
Total $70,000.00
- $22,926.67 $92,926.67 (1,326.67) $91,600.00 $96,180.00
Significant Dates
Dated
Y 7/12/2018
First Coupon Date
2/01/2019
Yield Statistics
Bond Year Dollars
— $633.69
Average Life
9.053 Years
Average Coupon
_ 3.6179377%
Net Interest Cost (NIC)
_ _ 3.7186802%
True Interest Cost (TIC)
_
3.7143652%
Bond Yield for Arbitrage Purposes
3.0858095%
All Inclusive Cost (AIC) _
_ _-_ 4.3252176%
Series 2018A GO Imp Bonds I Revenue Portion (429) 1 6/19/2018 1 10:39 AM
EHLERS
LEADERS IN PUBLIC FINANCE
City of Gem Lake, Minnesota
$610,179 General Obligation Improvement Bonds, Series 2018A
Assessments
Equal P&I - Flat 4.00% Rate
Assessments
Date Principal Coupon Interest Total P+I
12/31/2019
30,473.02
4.000%
24,407.17
54,880.19
12/31 /2020
31,691.94
4.000%
23,188.24
54,880.18
12/31/2021
32,959.62
4.000%
21,920.56
54,880.18
12/31/2022
34,278.00
4.000%
20,602.18
54,880.18
12/31 /2023
35,649.12
4.000%
19,231.06
54,880.18
12/31/2024
37,075.09
4.000%
17,805,10
54,880.19
12/31/2025
38,558.09
4.000%
16,322.10
54,880.19
12/31 /2026
40,100.41
4.000%
14,779.78
54,880.19
12/31/2027
41,704.43
4.000%
13,175.76
54,880.19
12/31/2028
43,372.61
4.000%
11,507.58
54,880.19
12/312029
45,107.51
4.000%
9,772.68
54,880.19
12/31/2030
46,911.81
4.000%
7,968.38
54,880.19
12/31/2031
48,788.28
4.000%
6,091.90
54,880.18
12/31 /2032
50,739.81
4.000%
4,140.36
54,880.17
12/31/2033
52,769.41
4.000%
2,110.78
54.880.19
Total
$610,179.15
-
$213,023.63
$823,202.78
Significant Dates
Filin;_ I>,, 1/01/2019
I.First i ......... __._ 12.012019
Series 2018A GO Imp Bonds I SINGLE PURPOSE 1 6/19/2018 1 10:38 AM
EHLERS
LEADERS IN PUBLIC FINANCE
S&P Global
Ratings
RatingsDirect @
Summary:
Gem Lake, Minnesota; Non -School
State Programs
Primary Credit Analyst:
Nancy M Denapoli, Chicago (1) 312-233-7013; nancy.denapoli@spglobal.com
Secondary Contact:
Cora Bruemmer, Chicago + 1 (312) 233 7099; cora.bruemmer@spglobal.com
Table Of Contents
..........................................................................................................
Rationale
Outlook
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JUNE 14, 2018 1
Summary:
Gem Lake, Minnesota; Non -School State Programs
Credit Profile
US$0.665 mil GO imp bnds ser 2018A dtd 07/12/2018 due 02/01/2034
Long Term Rating AA+/Stable New
Rationale
Minnesota Credit Enhancement Program for Cities and Counties
S&P Global Ratings assigned its 'AA+' rating to Gem Lake, Minn.'s series 2018A GO improvement bonds. The outlook
is stable.
Officials intend to use bond proceeds to finance the construction of the 2018 Schueneman Road Reconstruction
Project. The bonds are payable from special assessments levied on benefited property and are also general obligations
(GO) of the city for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount.
Governing statutes
Authorized by Minnesota Statutes, Section 446A.086, the Minnesota Credit Enhancement Program was established in
2000 for counties, and cities were added to the program in 2008, to provide for the timely payment of principal and
interest on a debt obligation and prevent a potential city or county default. Payments from the state represent a
standing appropriation from the state's general fund. We view this standing appropriation pledge as equivalent to a
general fund pledge because the standing appropriation does not require adoption of a budget or any action of the
legislature to make payment, although a legislative action could repeal the standing appropriation. Furthermore, the
standing appropriation is not subject to executive unallotment authority. Additionally, the credit enhancement
program supports projects that are central to the state of Minnesota's operations and purpose. In our opinion, there is
no unusual political, timing, or administrative risk related to the debt payment. This rating moves in conjunction with
that of the state GO rating.
Eligibility requirements
To qualify for participation in the Minnesota Credit Enhancement Program, cities and counties must apply to the
Minnesota Public Facilities Authority (PFA) prior to issuing the bonds. The issuer must submit the application for
program participation, the credit enhancement agreement signed by the city/county and the paying agent, bond
counsel opinion, and the authorizing resolution binding it to the provisions of Minnesota Statutes, Section 446A.086.
Program provisions
Participation in the program is voluntary, and the prospective entity must apply for enhancement before the bond sale
of each issue. A participating city or county must covenant in its authorizing resolution to:
Notify the authority no less than 15 business days before the payment date if the city/county is unable to make full
or partial payment on the due date;
WWW.STANDARDANDPOOBS.COM/RATINGSDIRECT JUNE 14, 2018 2
Summary: Gem Lake, Minnesota; Non -School State Programs
• Deposit with the paying agent three days before the date on which the debt service payment is due an amount
sufficient to make that payment; and
• Include a provision in the city or county's agreement with the paying agent that requires the paying agent to inform
the commissioner of the PFA at least two business days before a debt service payment if it becomes aware of a
default, a potential default, or if there are insufficient funds on deposit with the paying agent.
Per the state procedures, PFA must submit notice and request an appropriation from Minnesota Management and
Budget (MMB) within one hour of notification from the paying agent. MMB will then establish an appropriation
account and process the payment to the paying agent within two hours of receiving the request from PFA. State
statute requires that MMB pay the paying agent on or before the date due. The amounts needed for this purpose are
appropriated from the state general fund. If the state makes a payment on a participating city or county's behalf, the
city or county is obligated to repay the state with interest. The commissioner of MMB may reduce state aid payable to
the city or county by a corresponding amount, and any reduced aid reverts to the state's general fund. However,
participation in the programs does not require that an entity's state aid be more than debt service in any given year,
nor is there any sort of coverage test. Once a city or county enters the program and is accepted by the state, it cannot
rescind its application as long as any debt obligation of that issue is outstanding.
Oversight
The PFA tracks each city and county credit enhancement bond issuance and its associated application information.
MMB also tracks this information and collects data from PFA on a periodic basis, including the debt service schedules
for each issue enrolled in the program. MMB maintains statewide procedures that govern the payment process for the
credit enhancement program for cities and counties. We believe the state has strong tracking processes and
well -documented payment procedures in place that enhance the state's ability to make timely debt service payment if
required.
Outlook
The stable outlook on the enhanced rating reflects that on Minnesota and moves in tandem with the state GO rating
and outlook.
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors,
have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria.
Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is
available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found
on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left
column.
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JUNE 14, 2018 3
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