G.O. Bond Sale, Support Stormwater Projects
DU"B~JE
~~~
MEMORANDUM
March 11, 2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Bond Sale to Support Stormwater Projects
The sale of General Obligation Bonds to support stormwater projects will be held
Monday, March 21,2005 at 11 :00 a.m. The results will be brought to the March 21 City
Council meeting.
(1,1 t~ C;:",;1diL--
Michael C. an Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
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KGiId 3- '/ - 05
AHLERS ~COONEY, P.C.
ATTORNEYS AT LAW
100 COURT AVENUE · SUITE 600
DES MOINES. IOWA 50309-2231
PHONE 515-243-7611
FAX: 515-243-2149
WWW.AHLERSLAW.COM
WILLIAM J. NOTH
WNOTHOAHLERSLAW.COM
Direct Dial:
(515)246-0332
March 8, 2005
Mr. Ken TeKippe
Finance Officer
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001-4864
RE: $1,750,000 General Obligation Bonds, Series 2005{\
$4,270,000 General Obligation Urban Renewal Bonds,
Series 2005B
$2,995,000 General Obligation Urban Renewal Bonds,
Taxable Series 2005C
Dear Mr. TeKippe:
With this letter I am enclosing suggested proceedings for the sale date of March
21, 2005, awarding the above Bonds to the best bidders for the same.
At the designated time, sealed and electronic bids for the Bonds should be
received by the Finance Officer and listed in a report of sale to be delivered to the City
Council. After a final call for sealed bids, the bids should then be opened and the best
bid recorded. Only sealed and electronic bids are permitted by the terms of sale. All bids
should then be referred to the Council for award of the Bonds.
The Terms of Offering set out the restrictions on the type of interest rates which
may be bid. Bids must comply with the Terms of Offering. Different interest rates may
be bid for each issue. Each interest rate must be in a multiple of one-eighth or one-
twentieth of one percent.
Extra copies of the proceedings are enclosed to be completed as the originals and
returned to us for our transcript of the action taken. We also would appreciate receiving
copies of the signed bid forms for each series.
WISHARD & BAILY-I888: GUERNSEY & BAILY - 1893: BAILY & STIPP -1901: STIPP. PERRY. BANNISTER & STARZINGER-1914: BANNISTER. CARPENTER.
AHLERS & COONEY - 1950: AHLERS. COONEY. DDRWEILER. ALLBEE. HAYNIE & SMITH - 1974: AHLERS. COONEY. DORWEILER. HAYNIE. SMITH & ALLBEE. P.C. - 1990
March 8, 2005
Page 2
If any questions arise, please keep me advised.
Yours very truly,
~
William J. N oth
WJN:dc
encl.
cc: Barry Lindahl
Tionna Pooler
David Dirks
DCORNELL\444449.1 \WP\1 0422070
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. . \. '(11ns Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body:
The City Council of Dubuque, Iowa.
Date of Meeting:
, 2005.
Time of Meeting:
o'clock .M.
Place of Meeting:
Auditorium, Carnegie-Stout Public Library, Dubuque, Iowa.
PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental
body will meet at the date, time and place above set out. The tentative agenda for said'
meeting is as follows:
. $1,750,000 General Obligation Bonds, Series 2005A
. Resolution directing sale.
Such additional matters as are set forth on the additional page(s) attached hereto.
(number)
,I
This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of
Iowa, and the local rules of said governmental body.
City Clerk, Dubuque, Iowa
. - .
. 2005
The Finance Director of Dubuque, Iowa, met in the office of the Finance Director,
City Hall, Dubuque, Iowa, at o'clock _.M., on the above date, to open sealed
bids received, access electronic bids and to refer the sale of the Bonds to the best and
most favorable bidder for cash, subject to approval by the City Council at
o'clock .M. on the above date.
The following persons were present:
* * * * * * * *
-1-
This being the time and place for the opening of bids for the sale of$I,750,000
General Obligation Bonds, Series 2005A, the meeting was opened for the receipt of bids
for the Bonds. The following actions were taken:
1. Sealed bids were filed and listed in the minutes while unopened, as follows:
Name & Address of Bidders:
2. The Finance Officer then declared the time for filing of sealed bids to be closed
and that the sealed bids be opened. The sealed bids were opened and announced.
3. Electronic bids received were accessed and announced as follows:
Name & Address of Bidders:
"
4. The best bid was determined to be as follows:
Name & Address of Bidder:
Net Interest Cost: $
True Interest Cost:
%
All bids were then referred to the Council for action in accordance with the Notice
of Sale.
-2-
session, in the
o'clock _oM., on
, in the chair,
. .
The City Council of Dubuque, Iowa, met in
Auditorium, Carnegie-Stout Public Library, Dubuque, Iowa, at
the above date. There were present Mayor
and the following named Council Members:
Absent:
*******
-3-
. 2005
Council Member Pat r i cia C 1 in e introduced the following
Resolution entitled "RESOLUTION DIRECTING SALE OF $1,750,000 GENERAL
OBLIGATION BONDS, SERIES 2005A" and moved its adoption. Council Member
Joyce Connors seconded the motion to adopt. The roll was called and the
vote was,
AYES: Buol, Cline, Connors, Markham,
Michalski, Nicholson
NAYS: Duggan
Whereupon, the Mayor declared the following Resolution duly adopted:
RESOLUTION NO. 117-05
RESOLUTION DIRECTING SALE OF $1,750,000
GENERAL OBLIGATION BONDS, SERIES 2005A
WHEREAS, pursuant to notice as required by law, bids have been received at
public sale for the Bonds described as follows and the best bid received is determined to
be the following:
$1,750,000 GENERAL OBLIGATION BONDS, SERIES 2005A:
Bidder: Northland Secur i ties
of
Minneapolis, MN
the terms of said bid being:
Purchase Price: $ 1,732,500.00
True Interest Cost: 4 . 23 8 3
%
Net Interest Cost: $ 839,677.31
-4-
:
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section I. That the bid for the Bonds as above set out is hereby determined to be
the best and most favorable bid rec'eived and, said Bonds are hereby awarded based on
said bid.
Section 2. That the statement of information for Bond bidders and the form of
contract for the sale of said Bonds are hereby approved and the Mayor and Clerk are
authorized to execute the same on behalf ofthe City.
Section 3. That the notice of the sale of the Bonds heretofore given and all acts of
the Clerk done in furtherance of the sale of said Bonds are hereby ratified and approved.
PASSED AND APPROVED, this 21st day of March
,2005.
Mayor
ATTEST:
~
ity Clerk
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CIG-3
9/91
CERTIFICATE
STATE OF IOWA
)
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)
COUNTY OF DUBUQUE
I, the undersigned City Clerk of Dubuque, Iowa, do hereby certifY that attached is
a true and complete copy of the portion of the corporate records of said Municipality
showing proceedings of the Council, and the same is a true and complete copy of the
action taken by said Council with respect to said matter at the meeting held on the date
indicated in the attachment, which proceedings remain in full force and effect, and have
not been amended or rescinded in any way; that meeting and all action thereat was duly
and publicly held in accordance with a notice of meeting and tentative agenda, a copy of
which was timely served on each member of the Council and posted on a bulletin board
or other prominent place easily accessible to the public and clearly designated for that
purpose at the principal office of the Council (a copy of the face sheet of said agenda
being attached hereto) pursuant to the local rules of the Council and the provisions of
Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at
least twenty-four hours prior to the commencement of the meeting as required by said law
and with members of the public present in attendance; I further certifY that the individuals
named therein were on the date thereof duly and lawfully possessed of their respective
city offices as indicated therein, that no Council vacancy existed except as may be stated
in said proceedings, and that no controversy or litigation is pending, prayed or threatened
involving the incorporation, organization, existence or boundaries of the City or the right
of the individuals named therein as officers to their respective positions.
WITNESS my hand and the seal of said Municipality hereto affixed this 22 nd
day of March ,2005.
SEAL
DCORNELL \444441.1 \ WP\ 10422070
-6-
(ThIs Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body:
The City Council of Dubuque, Iowa.
Date of Meeting:
March 21
, 2005.
Time of Meeting:
6: 30 o'clock p.M.
Place of Meeting:
Auditorium, Carnegie-Stout Public Library, Dubuque, Iowa.
PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental
body will meet at the date, time and place above set out. The tentative agenda for said
meeting is as follows:
$1,750,000 General Obligation Bonds, Series 2005A
· Resolution directing sale.
Such additional matters as are set forth on the additional 10 page(s) attached hereto.
(number)
This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of
Iowa, and the local rules of said governmental body.
~~
March 21, 2005
The Finance Director of Dubuque, Iowa, met in the office of the Finance Director,
City Hall, Dubuque, Iowa, at 11 :00 o'clock A.M., on the above date, to open sealed bids
received, access electronic bids and to refer the sale of the Bonds to the best and most
favorable bidder for cash, subject to approval by the City Council at 6:30 o'clock P.M. on
the above date.
The following persons were present:
Ken TeKippe, Finance Director
Dawn Lang, Budget Director
Jeanne Schneider, City Clerk
Dave Dirks, Public Financial Management
********
This being the time and place for the opening of bids for the sale of$I,750,000
General Obligation Bonds, Series 2005A, the meeting was opened for the receipt of bids
for the Bonds. The following actions were taken:
1. Sealed bids were filed and listed in the minutes while unopened, as follows:
Name & Address of Bidders:
Northland Securities - Minneapolis, MN
2. The Finance Officer then declared the time for filing of sealed bids to be closed
and that the sealed bids be opened. The sealed bids were opened and announced.
3. Electronic bids received were accessed and announced as follows:
Name & Address of Bidders:
Harris Trust and Savings Bank - Chicago, IL
4. The best bid was determined to be as follows:
Name & Address of Bidder: Northland Securities - Minneapolis, MN
Net Interest Cost: $839,677.31
True Interest Cost: 4.2383%
All bids were then referred to the Council for action in accordance with the Notice
of Sale.
-2-
March 21
. 2005
The City Council of Dubuque, Iowa, met in Regular session, in the
Auditorium, Carnegie-Stout Public Library, Dubuque, Iowa, at 6: 30 o'clock ~.M., on
the above date. There were present Mayor Terrance M. Duggan , in the chair,
and the following named Council Members:
Roy Buol, patricia Cline, Joyce Connors,
John Markham, Ann Michalski, Dan Nicholson
Absent:
None
* * * * * * *
-3-
DU"~~E
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MEMORANDUM
March 17. 2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Moody's Rating
After review by Moody's Investor Services, the City has been advised that the City has
retained its Aa2 bond rating. You will recall that the City's bond rating was upgraded
from Aa3 to Aa2 in 2003.
L (I
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Mictfael c. Van Mllligen '-
MCVM/jh
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
Dawn Lang, Budget Director
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Ken Teki~e
From:
Sent:
To:
Subject:
Moody's Investors Service [epi@moodys.com]
Monday, March 14, 20054:56 PM
ktekippe@cityofdubuque.org
Dubuque (City of) IA
MOODY'S ASSIGNS Aa2 RATING TO THE CITY OF DUBUQUE'S (IA) $9 MILLION G.O. BONDS, SERIES
2005
Aa2 RATING AFFIRMATION AFFECTS $38.3 MILLION OF OUTSTANDING PARITY DEBT, INCLUDING CURRENT
ISSUES
Dubuque (City of) IA
Municipality
Iowa
Moody's Rating
Issue
Rating
General Obligation Bonds, Series 2005A Aa2
Sale Amount $1,750,000
Expected Sale Date 03/21/05
Rating Description General Obligation Unlimited Tax
General Obligation Urban Renewal Bonds, Series 2005B Aa2
Sale Amount $4,270,000
Expected Sale Date 03/21/05
Rating Description General Obligation Unlimited Tax
General Obligation Urban Renewal Bonds Taxable, Series
2005C Aa2
Sale Amount $2,995,000
Expected Sale Date 03/21/05
Rating Description General Obligation Unlimited Tax
NEW YORK, March 14, 2005 -- Moody's Investors Service has assigned a Aa2 rating to the
City of Dubuque's (IA) $1,750,000 General Obligation Bonds, Series 2005A; $4,270,000
General Obligation Urban Renewal Bonds, Series 2005B; and $2,995,000 General Obligation
Urban Renewal Bonds Taxable, Series 2005C. All three bond series are general obligations
of the city for which it has pledged its full faith and credit to levy ad valorem taxes
without limitation as to rate or amount. Proceeds from the Series 2005A will be used to
finance storm water and storm sewer utility improvements. Proceeds from the Series 2005B
wand 2005C will be used to finance the grading and construction of the former Bergfeld
farm property, a retaining wall and other amenities in the Bergfeld Recreation Area,
street improvements, public trails in the urban renewal district and other essential
corporate purpose projects. Concurrently, Moody's has affirmed the Aa2 rating on the
city's $38.3 million of outstanding general obligation parity debt, including the current
issues. The Aa2 rating incorporates the city's stable and diverse local economy with
expected future growth; sound financial operations with healthy reserves and a large
drawdown expected; and minimal debt burden with rapid principal amortization and limited
future borrowing needs.
STABLE AND DIVERSE LOCAL ECONOMY - THE AMERICA'S RIVER PROJECT EXPECTED TO DRIVE NEAR-TERM
GROWTH
Located on the Mississippi River in northeast Iowa, near the Iowa-Illinois-Wisconsin
border, Dubuque serves as the trade and service center for a large tri-state region. The
city has important manufacturing, institutional and tourism sectors, with tourism expected
to be augmented through the America's River Project. Full valuation of the city, currently
at $2.66 billion, has grown modestly at an average annual rate of 6.1% over the last five
1
years. Taxable valuation has only grown at the average rate of 3.7% for the same time
period due to state-mandated rollbacks and the phase out of machinery and equipment, which
_ limit property eligible for taxation. Moody's believes that the rollbacks and phase out
will not significantly impact the city's property tax base due to modest long-term growth
in the commercial, residential and industrial sectors. The city's tax base should continue
to grow at a moderate rate, despite residential rollbacks and the phase out of machinery
and equipment, as a result of ongoing construction in the commercial and residential
sectors, including the America's River Project. Wealth levels for the city are on par with
state averages as median family income and per capita income representing 97.0% and 99.7%
of state averages, respectively. Similarly, the median housing value of $84,400 represents
107.2% of the state average. The unemployment rate for the City of Dubuque was 5.6% for
December 2004 and above the state average of 4.7%. Full value per capita is average at
$46,201.
Future growth of the city's tax base is expected to be aided by the development of the
America's River Project, which seeks further major development of the city's riverfront
along the Mississippi River. The total project cost is $118 million and is being funded by
a combination of private sources, bonded debt, state and federal grants and pay-as-you-go
financing. The development includes a 700,000 square-foot interpretive museum, an 18-mile
bike/hike trail system, and a 1,000 person public amphitheater. In addition, the
developments are supported by a $22 million hotel with an indoor water park as well as the
$26 million Grand River Conference Center. Moody's believes that the developments are
likely to spur additional tourist and economic activity, despite a national economic
slowdown, given an expected regional draw rather than a dependency on visitors arriving by
air travel.
SOUND FINANCIAL OPERATIONS WITH HEALTHY RESERVES - LARGE DRAWDOWN EXPECTED
Moody's expects the city's financial position to remain sound despite a substantial
expected drawdown given prudent fiscal management. In addition to steady rent payments
from the gaming concerns, the city also receives payments that are tied to the business's
profits. The city received approximately $9.2 million, $9.4 million and $11.5 million in
fiscal years 2002, 2003 and 2004. These revenues represented 25% of General Fund revenues
in fiscal year 2002 and 2003 but increased to 27% in fiscal year 2004. Concern over the
dependence on this vulnerable revenue stream is mitigated in that approximately 56% of
these revenues are devoted to capital projects and only 44% for general operations in
fiscal year 2005. In addition to the strong growth in gaming revenues, tight expenditure
control has also allowed the city to build its reserves. The city experienced large
operating surpluses in recent years, mostly due to increased gaming revenues, that have
resulted in healthy fur.d balances. The city incurred a deficit of $5 million in fiscal
year 2003 due to one-time capital projects related to the America's River Project.
However, it is important to note that the city realized a $470,195 operating surplus
before transfers. Fiscal year 2004 produced relatively balanced operations with a General
Fund balance of $16.9 million, or a healthy 37.3% of General Fund revenues. A substantial
drawdown of $7 million is expected for fiscal year 2005 primarily due to a one-time
capital project related to the financing of the new $12 million Municipal Service Center.
This would reduce the General Fund balance to $9.9 million, or a still healthy 21%, still
well above the city's goal of maintaining 10% of the operating budget.
Although the city is taxing at its General Fund levy limit of $8.10, it has some revenue-
raising flexibility. Approximately $5.3 million of expenditures related to insurance
premiums and employee benefits can be transferred to the Trust & Agency Levy, which levies
property taxes without limitation as to rate or amount. Furthermore, the city has the
flexibility to also utilize a $.27 Emergency Levy to support General Fund operations.
Moody's believes that the maintenance of a healthy General Fund balance helps to offset
the vulnerability of swings in variable gaming revenues and moderates the limitation on
financial flexibility posed by state-mandated property rollbacks. However, Moody's notes
the substantial future drawdowns in the General Fund balance reduces liquidity and could
hamper future credit quality.
MINIMAL DEBT BURDEN WITH RAPID PRINCIPAL AMORTIZATION AND LIMITED FUTURE BORROWING NEEDS
Moody's expects the city's debt burden to remain manageable due to continued tax base
growth and limited future borrowing needs. The city's direct debt burden is minimal at
1.3% and easily affordable as past growth in the tax base has kept it manageable.
Approximately one-third of the city's direct debt is from the November 2001 issuance of
$9.5 million for capital projects related to the Grand River Conference Center and public
2
improvements in the Port of Dubuque. The overall debt burden is also 1.5% and incorporates
a modest amount of overlapping debt from other local government units. Just about all of
. the $1.8 million in overlapping debt is attributable solely to Dubuque County. Water,
sewer, stormwater, parking fees, airport hangar rentals and tax increment financing
revenues all contribute to debt service, mitigating the impact on the general property tax
levy. As a result, the city has relatively low property tax rates compared to other cities
in Iowa. The city also has $1.35 million outstanding in Parking Revenue Bonds paid solely
from net parking revenues. The percentage of expenditures dedicated to debt service for
fiscal year 2004 was modest and very manageable at 2.9%, reflective of the minimal debt
burden. Principal amortization is rapid with 60.9% of direct debt obligations within 10
years and all debt within 20 years. Future borrowing is limited and should not change the
current debt position.
KEY STATISTICS:
2000 Population census: 57,686
2003 Full valuation: $2.66 billion
Full value per capita: $46,201
2000 Median family income: $46,564 (97.0% of state)
2000 Per capita income: $19,616 (99.7% of state)
2000 Median family housing: $84,400 (107.2% of state)
Direct debt burden: 1.5%
Overall debt burden: 1.5%
City of Dubuque unemployment rate (December 2004): 5.6% (119.1% of state)
Amortization of principal (10 years): 60.9%
Fiscal Year 2004 General Fund balance: $16.9 million (37.3% of General Fund
revenues)
Fiscal Year 2004 Gaming Revenues: $11.5 million or (27.5% of General Fund
revenues)
Post-sale general obligation parity debt: $38.3 million, including current issue
Post-sale parking revenue debt: $1.35 million
ANALYSTS:
John Crawford, Analyst, Public Finance Group, Moody's Investors Service Paul Nolan, Backup
Analyst, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
Copyright 2005, Moody's Investors Service, Inc. and/or its licensors including
Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH
INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER
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OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN
CONSENT. All information contained herein is obtained by MOODY'S from sources
believed by it to be accurate and reliable. Because of the possibility of human
or mechanical error as well as other factors, however, such information is
3
provided "as is" without warranty of any kind and MOODY'S, in particular,
makes no representation or warranty, express or implied, as to the accuracy,
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liability to any person or entity for (a) any loss or damage in whole or in
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and each such user must accordingly make its own study and evaluation of each
security and of each issuer and guarantor of, and each provider of credit
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Governance - Director and Shareholder Affiliation Policy."
4