HomeMy WebLinkAbout08-12-19 City Commission Packet Materials - A2. Res 5085, Authorizing the Issuance and Sale of the Remaining BPSC Bonds
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Kristin Donald, Finance Director
SUBJECT: Commission Resolution No. 5085 – Authorizing the issuance and private
negotiated sale of the remaining $36,965,000 Million voter-approved
Bozeman Public Safety Center bonds.
MEETING DATE: August 12, 2019
AGENDA ITEM: Action
RECOMMENDATION: Approve Resolution No. 5085 – Authorizing the issuance and
private negotiated sale of the remaining $36,965,000 Million voter-approved Bozeman Public
Safety Center bonds.
BACKGROUND:
In November 2018, the citizens of Bozeman approved the bond issuance for the building of the
Bozeman Public Safety Center. In May, the City put out a request for proposals for underwriting
services for the bond issuance. Stifel, Nicolaus & Company have been selected as underwriter.
This Resolution is necessary to authorize the Mayor, City Manger, Assistant City Manager and
the Finance Director to negotiate the sale of the bonds, at the time and date most advantageous to
the City.
ALTERNATIVES: As suggested by the Commission
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FISCAL EFFECTS: This will obligate the City to pay a number of costs of issuance for the
bond issuance. These items will be paid from the proceeds of the sale, according to the
estimated Sources and Uses of Funding, attached. Final figures will be dependent on interest
rates at the time of the bond sale.
Attachment: Resolution No. 5085
Estimated/Preliminary Pricing 7.30.19
Report compiled on July 31, 2019
190
Page 1 of 5
RESOLUTION NO. 5085
RESOLUTION RELATING TO UP TO $36,965,000 IN PRINCIPAL AMOUNT OF
GENERAL OBLIGATION BONDS; AUTHORIZING THE ISSUANCE AND PRIVATE
NEGOTIATED SALE THEREOF FOR THE BOZEMAN PUBLIC SAFETY CENTER
BE IT RESOLVED by the City Commission (the “Commission”) of the City of
Bozeman, Montana (the “City”) as follows:
Section 1
Recitals.
The electors of the City at an election duly called, noticed and held on November 6, 2018,
authorized this Commission to sell and issue general obligation bonds of the City in the aggregate
principal amount of up to $36,965,000 for the purpose of paying, with other available funds of the
City, the costs of designing, constructing, equipping and furnishing on City-owned land at the
corner of East Oak Street and North Rouse Avenue a new Bozeman Public Safety Center, to
include the City’s fire station #1, police department headquarters, municipal courts, prosecution,
victim services, and other justice services, and associated site improvements (the “Project”), and
costs associated with the sale and issuance of the bonds. The City has determined at this time to
sell and issue general obligation bonds of the City (the “Series 2019 Bonds”) to finance or
reimburse the City for a portion of the costs of the Project and to pay costs of issuing the Series
2019 Bonds. The indebtedness to be evidenced by the Series 2019 Bonds and all other outstanding
general obligation indebtedness of the City does not exceed the limitation set forth in Section 7-7-
4201, M.C.A.
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Resolution 5085, Authorizing the Issuance and Private Negotiated Sale of General Obligation Bonds
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Section 2
Sale of Series 2019 Bonds; Bond Purchase Agreement.
Pursuant to Montana Code Annotated, Sections 7-7-4254 and 17-5-107, this Commission
hereby determines that it is in the best interests of the City to sell the Series 2019 Bonds through
a private negotiated sale. Stifel, Nicolaus & Company, Incorporated, of Denver, Colorado (the
“Underwriter”), will serve as underwriter of the Series 2019 Bonds.
The Series 2019 Bonds shall be sold on terms and at a purchase price within the following
limitations:
(1) underwriter’s discount shall not exceed 0.3% of the principal amount of the
Series 2019 Bonds, exclusive of original issue premium or discount;
(2) the aggregate principal amount of the Series 2019 Bonds shall not exceed
$36,965,000;
(3) the true interest cost of the Series 2019 Bonds shall not exceed 4.50% per
annum;
(4) the Series 2019 Bonds shall be subject to redemption on a date that is not later
than one-half their term; and
(5) the term of the Series 2019 Bonds shall not exceed twenty (20) years.
All costs of issuing the Series 2019 Bonds (including, without limitation, underwriter’s
discount, fees and expenses of underwriter’s counsel and bond counsel, fees of the paying agent
and registrar, rating agency fees and related costs, Preliminary and final Official Statement costs,
Depository Trust Company fees, CUSIP costs, costs of printing the Series 2019 Bonds, and
miscellaneous expenses, if any) shall be paid by the City from proceeds of the Series 2019 Bonds.
The Mayor, the City Manager, the City Finance Director and the Assistant City Manager
are hereby authorized and directed to approve the principal amounts, purchase price, maturity
dates, basic and additional interest rates, original issue discount and premium, and conditions
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Resolution 5085, Authorizing the Issuance and Private Negotiated Sale of General Obligation Bonds
Page 3 of 5
pertaining to the purchase and sale of the Series 2019 Bonds, subject to the limitations contained
above in this Section 2. Upon approving such terms, the Mayor, the City Manager, the City Finance
Director and the Assistant City Manager are hereby authorized and directed to approve, execute
and deliver a bond purchase agreement (the “Bond Purchase Agreement”), containing the
agreement of the City to sell, and the agreement of the Underwriter to purchase, the Series 2019
Bonds on the terms so approved, and containing such other provisions as such officers shall deem
necessary or appropriate. In the event of the absence or disability of any of the Mayor, the City
Manager, the City Finance Director or the Assistant City Manager, another member or members
of this Commission shall make such approvals and execute and deliver the Bond Purchase
Agreement. The execution and delivery by not less than two appropriate officers of the City of the
Bond Purchase Agreement shall be conclusive as to the approval of such officers of the terms of
the Series 2019 Bonds and the agreement of the City to sell the Series 2019 Bonds on such terms
in accordance with the provisions thereof.
Section 3
Form.
The form and details of the Series 2019 Bonds and the security therefor shall be prescribed
by a subsequent resolution to be adopted by this Commission.
Section 4
Preliminary Official Statement.
The [Mayor, the City Manager, the City Finance Director, the Assistant City Manager],
and other officers of the City, in cooperation with the Underwriter and Dorsey & Whitney LLP,
as Bond Counsel, are hereby authorized and directed to prepare a Preliminary Official Statement
to be distributed to potential purchasers of the Series 2019 Bonds. The Preliminary Official
Statement shall contain such information as shall be advisable and necessary to accurately describe
the City and the security for and terms and conditions of the Series 2019 Bonds. Each of the Mayor,
the City Manager, the City Finance Director and the Assistant City Manager (or in the event of the
absence or disability of any of the Mayor, the City Manager, the City Finance Director or the
Assistant City Manager, another member of this Commission) is hereby authorized and directed
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Resolution 5085, Authorizing the Issuance and Private Negotiated Sale of General Obligation Bonds
Page 4 of 5
on behalf of the City to approve the Preliminary Official Statement, and to deem it final as of its
date in accordance with paragraph (b)(1) of Rule 15c2-12 (the “Rule”), promulgated by the
Securities and Exchange Commission under the Securities and Exchange Act of 1934, and to
authorize the Underwriter to distribute the Preliminary Official Statement.
Section 5
Continuing Disclosure.
To permit the Underwriter and other participating underwriters in the primary offering of
the Series 2019 Bonds to comply with paragraph (b)(5) of the Rule, the City will covenant and
agree, for the benefit of the registered holders and beneficial owners from time to time of the
outstanding Series 2019 Bonds, to provide annual reports of specified information and notice of
the occurrence of certain events.
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 12th day of August, 2019.
___________________________________
CYNTHIA L. ANDRUS Mayor
ATTEST:
__________________________________ ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN
City Attorney
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Resolution 5085, Authorizing the Issuance and Private Negotiated Sale of General Obligation Bonds
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CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting City Clerk of the City of Bozeman,
Montana (the “City”), hereby certify that attached hereto is a true copy of Resolution No. 5085
entitled: “RESOLUTION RELATING TO UP TO $36,965,000 IN PRINCIPAL AMOUNT
OF GENERAL OBLIGATION BONDS; AUTHORIZING THE ISSUANCE AND
PRIVATE NEGOTIATED SALE THEREOF FOR THE BOZEMAN PUBLIC SAFETY
CENTER” (the “Resolution”), on file in the original records of the City in my legal custody; that
the Resolution was duly adopted by the City Commission at a meeting on August 12, 2019, and
that the meeting was duly held by the City Commission and was attended throughout by a quorum,
pursuant to call and notice of such meeting given as required by law; and that the Resolution has
not as of the date hereof been amended or repealed.
I further certify that, upon vote being taken on the Resolution at said meeting, the following
Commissioners voted in favor thereof:
; voted against the same:
; abstained from voting thereon: ; or
were absent: .
WITNESS my hand officially this 13th day of August, 2019.
ROBIN CROUGH
City Clerk
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Jul 30, 2019 2:23 pm Prepared by Stifel
TABLE OF CONTENTS
City of Bozeman, Montana
General Obligation Bonds, Series 2019
Market Rates as of July 30, 2019
Report Page
Sources and Uses of Funds ...........................1
Bond Pricing .................................2
Bond Debt Service ...............................3
Bond Summary Statistics ............................5
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Jul 30, 2019 2:23 pm Prepared by Stifel Page 1
SOURCES AND USES OF FUNDS
City of Bozeman, Montana
General Obligation Bonds, Series 2019
Market Rates as of July 30, 2019
Sources:
Bond Proceeds:
Par Amount 34,525,000.00
Premium 3,722,586.60
38,247,586.60
Uses:
Project Fund Deposits:
Project Fund 37,965,000.00
Delivery Date Expenses:
Cost of Issuance 175,000.00
Underwriter's Discount 103,575.00
278,575.00
Other Uses of Funds:
Contingency 4,011.60
38,247,586.60
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Jul 30, 2019 2:23 pm Prepared by Stifel Page 2
BOND PRICING
City of Bozeman, Montana
General Obligation Bonds, Series 2019
Market Rates as of July 30, 2019
Maturity Yield to Call Call
Bond Component Date Amount Rate Yield Price Maturity Date Price
Serial Bond:
07/01/2020 945,000 3.000% 1.100% 101.450
07/01/2021 1,260,000 3.000% 1.110% 103.301
07/01/2022 1,295,000 2.000% 1.140% 102.337
07/01/2023 1,325,000 2.000% 1.160% 103.088
07/01/2024 1,350,000 2.000% 1.190% 103.744
07/01/2025 1,375,000 5.000% 1.290% 120.561
07/01/2026 1,445,000 5.000% 1.390% 123.244
07/01/2027 1,515,000 5.000% 1.490% 125.659
07/01/2028 1,595,000 5.000% 1.570% 127.995
07/01/2029 1,675,000 5.000% 1.660% 130.004
07/01/2030 1,755,000 4.000% 1.860% 119.034 C 2.024% 07/01/2029 100.000
07/01/2031 1,825,000 4.000% 2.020% 117.472 C 2.297% 07/01/2029 100.000
07/01/2032 1,900,000 4.000% 2.130% 116.412 C 2.491% 07/01/2029 100.000
07/01/2033 1,975,000 4.000% 2.280% 114.984 C 2.690% 07/01/2029 100.000
07/01/2034 2,055,000 3.000% 2.530% 104.043 C 2.667% 07/01/2029 100.000
07/01/2035 2,115,000 3.000% 2.610% 103.341 C 2.738% 07/01/2029 100.000
07/01/2036 2,180,000 3.000% 2.690% 102.645 C 2.801% 07/01/2029 100.000
07/01/2037 2,245,000 3.000% 2.740% 102.212 C 2.840% 07/01/2029 100.000
07/01/2038 2,315,000 3.000% 2.800% 101.696 C 2.882% 07/01/2029 100.000
07/01/2039 2,380,000 3.000% 2.860% 101.183 C 2.921% 07/01/2029 100.000
34,525,000
Dated Date 09/24/2019
Delivery Date 09/24/2019
First Coupon 01/01/2020
Par Amount 34,525,000.00
Premium 3,722,586.60
Production 38,247,586.60 110.782293%
Underwriter's Discount ‐103,575.00 ‐0.300000%
Purchase Price 38,144,011.60 110.482293%
Accrued Interest
Net Proceeds 38,144,011.60
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Jul 30, 2019 2:23 pm Prepared by Stifel Page 3
BOND DEBT SERVICE
City of Bozeman, Montana
General Obligation Bonds, Series 2019
Market Rates as of July 30, 2019
Period
Ending Principal Coupon Interest Debt Service
07/01/2020 945,000 3.000% 940,799.72 1,885,799.72
07/01/2021 1,260,000 3.000% 1,194,350.00 2,454,350.00
07/01/2022 1,295,000 2.000% 1,156,550.00 2,451,550.00
07/01/2023 1,325,000 2.000% 1,130,650.00 2,455,650.00
07/01/2024 1,350,000 2.000% 1,104,150.00 2,454,150.00
07/01/2025 1,375,000 5.000% 1,077,150.00 2,452,150.00
07/01/2026 1,445,000 5.000% 1,008,400.00 2,453,400.00
07/01/2027 1,515,000 5.000% 936,150.00 2,451,150.00
07/01/2028 1,595,000 5.000% 860,400.00 2,455,400.00
07/01/2029 1,675,000 5.000% 780,650.00 2,455,650.00
07/01/2030 1,755,000 4.000% 696,900.00 2,451,900.00
07/01/2031 1,825,000 4.000% 626,700.00 2,451,700.00
07/01/2032 1,900,000 4.000% 553,700.00 2,453,700.00
07/01/2033 1,975,000 4.000% 477,700.00 2,452,700.00
07/01/2034 2,055,000 3.000% 398,700.00 2,453,700.00
07/01/2035 2,115,000 3.000% 337,050.00 2,452,050.00
07/01/2036 2,180,000 3.000% 273,600.00 2,453,600.00
07/01/2037 2,245,000 3.000% 208,200.00 2,453,200.00
07/01/2038 2,315,000 3.000% 140,850.00 2,455,850.00
07/01/2039 2,380,000 3.000% 71,400.00 2,451,400.00
34,525,000 13,974,049.72 48,499,049.72
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BOND DEBT SERVICE
City of Bozeman, Montana
General Obligation Bonds, Series 2019
Market Rates as of July 30, 2019
Period
Ending Principal Coupon Interest Debt Service
07/01/2020 945,000 3.000% 940,799.72 1,885,799.72
07/01/2021 1,260,000 3.000% 1,194,350.00 2,454,350.00
07/01/2022 1,295,000 2.000% 1,156,550.00 2,451,550.00
07/01/2023 1,325,000 2.000% 1,130,650.00 2,455,650.00
07/01/2024 1,350,000 2.000% 1,104,150.00 2,454,150.00
07/01/2025 1,375,000 5.000% 1,077,150.00 2,452,150.00
07/01/2026 1,445,000 5.000% 1,008,400.00 2,453,400.00
07/01/2027 1,515,000 5.000% 936,150.00 2,451,150.00
07/01/2028 1,595,000 5.000% 860,400.00 2,455,400.00
07/01/2029 1,675,000 5.000% 780,650.00 2,455,650.00
07/01/2030 1,755,000 4.000% 696,900.00 2,451,900.00
07/01/2031 1,825,000 4.000% 626,700.00 2,451,700.00
07/01/2032 1,900,000 4.000% 553,700.00 2,453,700.00
07/01/2033 1,975,000 4.000% 477,700.00 2,452,700.00
07/01/2034 2,055,000 3.000% 398,700.00 2,453,700.00
07/01/2035 2,115,000 3.000% 337,050.00 2,452,050.00
07/01/2036 2,180,000 3.000% 273,600.00 2,453,600.00
07/01/2037 2,245,000 3.000% 208,200.00 2,453,200.00
07/01/2038 2,315,000 3.000% 140,850.00 2,455,850.00
07/01/2039 2,380,000 3.000% 71,400.00 2,451,400.00
34,525,000 13,974,049.72 48,499,049.72
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BOND SUMMARY STATISTICS
City of Bozeman, Montana
General Obligation Bonds, Series 2019
Market Rates as of July 30, 2019
Dated Date 09/24/2019
Delivery Date 09/24/2019
Last Maturity 07/01/2039
Arbitrage Yield 2.284105%
True Interest Cost (TIC) 2.438183%
Net Interest Cost (NIC) 2.586787%
All‐In TIC 2.487158%
Average Coupon 3.490850%
Average Life (years) 11.595
Duration of Issue (years) 9.513
Par Amount 34,525,000.00
Bond Proceeds 38,247,586.60
Total Interest 13,974,049.72
Net Interest 10,355,038.12
Total Debt Service 48,499,049.72
Maximum Annual Debt Service 2,455,850.00
Average Annual Debt Service 2,453,232.81
Underwriter's Fees (per $1000)
Average Takedown
Other Fee 3.000000
Total Underwriter's Discount 3.000000
Bid Price 110.482293
Par Average Average PV of 1 bp
Bond Component Value Price Coupon Life change
Serial Bond 34,525,000.00 110.782 3.491% 11.595 26,909.65
34,525,000.00 11.595 26,909.65
All‐In Arbitrage
TIC TIC Yield
Par Value 34,525,000.00 34,525,000.00 34,525,000.00
+ Accrued Interest
+ Premium (Discount) 3,722,586.60 3,722,586.60 3,722,586.60
‐ Underwriter's Discount ‐103,575.00 ‐103,575.00
‐ Cost of Issuance Expense ‐175,000.00
‐ Other Amounts
Target Value 38,144,011.60 37,969,011.60 38,247,586.60
Target Date 09/24/2019 09/24/2019 09/24/2019
Yield 2.438183% 2.487158% 2.284105%
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