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Home My WebLink About1995 01-30 CCP Work Session CITY COUNCIL AGENDA CITY OF BROOKLYN CENTER JANUARY 30, 1995 7 p.m. Work Session 1. Call to Order 2. Roll Call 3. Resolution Declaring Cost to be Assessed and Providing for- Hearing on Proposed Assessments for Improvement Project No. 1994 -03, 57th Avenue Street Improvement (5 minutes) 4. Presentation by Springsted Inc. on Bonding (30 minutes) 5. Presentation by Deloitte & Touche on City Finances (30 minutes) 6. Discuss Funding for Brooklyn Community Band (15 minutes) 7. Discuss Image Campaign (15 minutes) 8. Adjournment MEMORANDUM TO: Mayor Myrna Kragness Councilmember Kathleen Carmody Councilmember Debra Hilstrom Councilmember Barb Kalligher Councilmember Kristen Mann FROM: Gerald G. Splinter, City Manager DATE: January 27, 1995 SUBJECT: Setting Hearing g ea mg Date for 57th Avenue Improvement Protect The attached resolution sets the February 27, 1995, Council meeting as a hearing on the storm sewer and street improvement project for 57th Avenue effecting all properties within 300 feet of 57th Avenue between Logan and Camden Avenues North. This resolution sets the date for a public hearing. It does not in any way approve the project. Approval can only be considered at or after the scheduled hearing. The City Council early last year approved preliminary engineering for this project and placed it on the 1995 Proposed Improvement project list. The major benefit of this project would be to • eliminate major storm water drainage problems in the area of 57th and Dupont Avenues J g P P North and 57th and Humboldt Avenues North. i Member introduced the following resolution and • moved its adoption: RESOLUTION NO. RESOLUTION DECLARING COST TO BE ASSESSED AND PROVIDING FOR HEARING ON PROPOSED ASSESSMENTS FOR IMPROVEMENT PROJECT NO. 1994 -03, 57TH AVENUE STREET IMPROVEMENT WHEREAS, costs have been estimated for proposed street and storm sewer improvements on 57th Avenue North from Logan Avenue to Camden Avenue; and WHEREAS, it is proposed to assess a portion of the cost of street improvements against all properties abutting 57th Avenue North between Logan Avenue and Camden Avenue, and a portion of the cost of storm sewer improvements against all properties within the 57th Avenue drainage area, roughly all properties within 300 feet of 57th Avenue between Logan Avenue and Camden Avenue; and WHEREAS, the cost to be assessed to the properties is estimated to be: STREET STORM SEWER IMPROVEMENT IMPROVEMENT • Special Assessments $100,810 $100,000 WHEREAS, the Deputy City Clerk, with the assistance of the Director of Public Services, has prepared a proposed assessment roll for each segment showing the proposed amount to be specifically assessed for such improvement against every assessable lot, piece, or parcel of land within the district affected, without regard to cash valuation, as provided by law. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that: 1. That portion of the street imrpovement cost to be assessed against benefitted property owners is declared to be $100,810. 2. That portion of the storm sewer imrpovment cost to be assessed against benefitted property owners is declared to be $100,000. 3. A hearing shall be held on the 27th day of February, 1995, in the City Hall Council Chambers at approximately 7:00 p.m. to pass upon such assessment and at such time and place all persons owning property affected by such improvements will be given an opportunity to be heard with reference to such assessment. • RESOLUTION NO. 4. The Deputy City Clerk is directed to cause a notice of the hearing on the proposed assessment to be published once in the official newspaper at least two weeks prior to the hearing, and shall state in the notice the total cost of the improvement. 5. The Deputy City Clerk shall cause mailed notice to be given to the owner of each parcel described in the assessment roll not less than two weeks prior to the hearing. Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. P YP P Municipal Bond Essentials for for Decision Makers I c A Presentation to the City of Brooklyn Center, Minnesota Monday, January 30, 1995 SPRINGSTED PUBLIC FINANCE ADVISORS 1 Spingsted Mission Statement "S rin sted is an independent public finance p g p P advisory firm committed to providing the highest quality services, free of conflict and based on a strong foundation of knowledge and experience to governmental and non- profit entities, and other or p p organizations who g work with them, to accomplish their public policy goals. Springsted is committed to providing enhanced levels of service for our clients through expansion of our capabilities." Municipal Bond Essentials for Decision Makers The objectives of this presentation are that you will become familiar with the process of issuing municipal bonds, the participants in the process and be able to identify key decision points throughout the process. SPRINGSTED PUBLIC FINANCE ADVISORS Municipal Bond Essentials FINANCING PHILOSOPHY AND DISCIPLINE Fiscal Management Policy .............................................. ............................... 1 Capital Improvement Plan .............................................. ............................... 1 DETERMINING FINANCING METHODS Pay -as- You -Go (Cash) ................................................ ............................... 2 Pay -as- You -Use (Debt) ................................................ ............................... 2 Factors to Consider ................................................ ............................... 2 Examples................................................ ............................... 3 TYPES OF DEBT MunicipalBonds .............................................. ............................... 4 Typesof Municipal Bonds .............................................. ............................... 5 -7 Certificates of Participation (Lease Purchase Financing) ............................. 8 BOND FINANCING PARTICIPANTS The More Visible Participants ....................................... ............................... 9 -10 The Less Visible Participants ....................................... ............................... 11 -12 General Qualifications ....................................... ............................... 13 BOND FINANCING PROCESS The Finance Plan ............................................ ............................... 14 -15 Marketing............................................ ............................... 16 CreditRating ............................................ ............................... 17 Bond Sale and Settlement ............................................ ............................... 18 -19 GLOSSARY OF TERMINOLOGY ........................................ ............................... 20 -22 Supplement to Municipal Bond Essentials for Minnesota Issuers Introduction to Springsted N SPRINGSTED Municipal Bond Essentials Financing Philosophy and Discipline Fiscal Management Policy • Revenues • Expenditures • Risk Management • Debt Management • Investment Management • Cash Flow Analysis Capital Improvement Plan • Identifies projects to be funded, funding sources and expenditures. • Establishes project priorities and available funding. • Demonstrates commitment to improvements. • Provides evidence of a long -term plan. • Coordinates a physical development plan with a financial plan. • Facilitates more efficient public investment. N SPRINGSTED Pagel Municipal Bond Essentials Determining Financing Methods Pay -as- You -Go (Cash) • Pay project costs from cash on hand using either current revenues or reserve funds. Pay -as- You -Use (Debt) • Issue debt and pay project costs from bond proceeds. • Debt is repaid over time by the users of the project. Factors to Consider • Equity - Are the beneficiaries of the project or service paying for it? • Effectiveness - Will the funding be sufficient and received in a timely fashion? • Efficiency - What financing method is most cost - effective? Page 2 F1 SPRINGSTED Municipal Bond Essentials Examples Pay -as- You -Go (Cash) • Budgetary Items /Replacement Items - Computers - Vehicles - Minor improvements /maintenance + Pay - as - You - Use (Debt) • Large Capital Costs /Long Useful Life - Buildings - Utilities - Major improvements F� SPRINGSTED Page 3 Municipal Bond Essentials Types of Debt O Municipal Bonds An obligation to pay a stated amount of money at a fixed future date made for the purpose of incurring debt. (A contract between the issuer and the bond owner.) Authority to Issue • Federal Law - Tax - Exempt or Taxable - Arbitrage Compliance - Bank Qualification • State Statutes /Charter - Debt Limit - Voter Approval - Method of Sale - Tax Levies - Interest Rates - Term i - Prepayment Option - Refundings Page 4 F1 SPRINGSTED Municipal Bond Essentials i Types of Municipal Bonds General Obligation Bonds /Notes (unlimited tax) - pledge a the full faith and credit and unlimited taxing power to pay debt service. Key Characteristics Source of Payment: Property taxes Purposes: Projects that benefit whole community State Law /Charter: Debt limit? Voter approval required? Risk/Cost: Highest security - lowest cost Credit Rating Impact: Full impact i N SPRINGSTED Page 5 Municipal Bond Essentials Revenue Bonds - pledge the revenues of a specified source to pay debt service. Additional assurances are covenanted within the bond documents. Key Characteristics Source of Payment: Specified revenues Purposes: Projects that benefit specific users State Law /Charter: Debt limit? Voter approval required? Risk/Cost: Higher than general obligations because of limited revenue stream. The degree of risk depends on the individual financing package. Credit Rating Impact: Credit rating is dependent on the degree of security the financing package has. The credit rating for a revenue bond is independent of an issuer's general obligation bond rating Page 6 N SPRINGSTED Municipal Bond Essentials General Obligation Revenue Bonds - pledge specified revenues and the issuer's full faith and credit and unlimited taxing powers. Key Characteristics Source of Payment: Specified revenues and property taxes Purposes: Whole community and /or specific areas State Law /Charter: Debt limit? Voter approval required? Risk/Cost: Same as general obligations Credit Rating Impact: Usually a full impact on the credit rating. May be mitigated depending on the revenue stream. F1 SPRINGSTED Page 7 Municipal Bond Essentials C Certificates of Participation (Lease /Purchase Financing) A government agency enters into an agreement with another party (lessor) to lease an asset. Lease payments are sufficient to pay the purchase price and associated interest cost of acquiring the asset. Key Characteristics Source of Payment: Tax revenues subject to annual appropriations (budget process) State Law /Charter: Debt limit? Voter approval required? Risk/Cost: Higher than general obligation depending on essentiality of project/use Credit Rating Impact: Full impact, usually half grade to full grade lower than general obligation debt. Page 8 F1 SPRINGSTED i Municipal Bond Essentials Bond Financing Participants The More Visible Participants • Issuer - Elected Officials /Staff - Involved throughout entire process - Information providers - Decision makers • Independent Financial Advisor 40 - Works solely for issuer to develop financing plan and assist through process - Responsibilities can include assistance in: . Issue structuring . Method of sale . Marketing documents . Credit rating . Award of sale . Settlement and bond record G� SPRINGSTED Page 9 Municipal Bond Essentials The More Visible Participants (continued) • Bond Counsel - Interprets federal laws, state laws and charter provisions applicable to the financing - Legal opinion certifies legal authorization to issue gives opinion on federal and state tax status - Prepares bond documents such as ordinances, resolutions, lease agreements, etc. • Engineer /Architect/Feasibility Consultant - Provides technical expertise on project timing and budget Page 10 SPRINGSTED Municipal Bond Essentials The Less Visible Participants • Credit Rating Agencies - Moody's Investors Service Standard & Poor's Corporation Fitch Investors Service - Representatives of the investor community - The credit rating provides a measure of the degree of risk to the investor for a security - The rating s u b investors t ai g used y o d their investment decision • Credit Enhancement Providers - Municipal bond insurance companies: AMBAC, Capital Guaranty, FGIC, FSA, MBIA - Letter -of- Credit (LOC) providers: commercial banks - Bond insurance and LOC's are used to increase marketability by protecting investors from default - Cost/Benefit analysis is required • Underwriters - Purchase your bonds and resell them to investors - Can be more visible in a negotiated transaction GJ SPRINGSTED Page 11 Municipal Bond Essentials 0 The Less Visible Participants (continued) • Investors - The "lender" (purchaser of your bonds) - Consist of individuals (retail) or commercial banks, insurance companies (institutional) and bond funds (retail proxies) Other - Registrar /Paying Agent - receives your funds and makes payments to bondholders - Trustee - fiduciary agent for bondholders - U.S. Treasury - has enacted specific regulations for issuance of tax - exempt debt; arbitrage, rebate, reimbursement, bank qualifications, taxable vs. tax - exempt - Depository - agency which provides book -entry settlement services such as registration of bond ownership and distribution of debt service payments i Page 12 G1 SPRINGSTED Municipal Bond Essentials General Qualifications "When selecting a financing team, the issuer must feel confident that participants have the necessary expertise to represent its interests and to successfully market its bonds. In general, the issuer should look for finance professionals with an understanding of the jurisdiction's needs, experience with similar types of securities, knowledge of beneficial approaches taken by other issuers, an understanding of innovative debt financing methods which can reduce costs or provide greater flexibility, and an ability to complete the transaction in a timely manner without undue burden on the issuer." Source: An Elected Officials Guide to Debt Issuance Government Finance Officers Association. G� SPRINGSTED Page 13 Municipal Bond Essentials Bond Financing Process The Finance Plan I Action Participants • Need is Identified • Issuer • Determine Financing Tool • Issuer / Financial Advisor - Cash (Pay -as- You -Go) - Debt (Pay -as- You -Use) - Combination, - If debt is involved - what type? • Structuring of Issue Issuer / Financial Advisor / Underwriter - Revenue streams - Term - Existing debt considerations - Future debt considerations - Market strategy Page 14 GJ SPRINGSTED Municipal Bond Essentials Action Participants • Credit Rating Strategy Issuer / Financial Advisor / Rating Agencies - Current status - New developments - Formal Presentation • Credit Enhancement Issuer / Financial Advisor / Providers - Cost/Benefit analysis - Direct purchase - Underwriter(s') option • Method of Sale Issuer / Financial Advisor / Underwriter (if negotiated) - Competitive historically lowest cost best bid, given market conditions promotes an open and fair process - Negotiated issue size less than $500,000, greater than $50 million market volatility story bond /credit concerns G� SPRINGSTED Page 15 Municipal Bond Essentials Marketing Action Participants • Official Statement All Parties - GFOA guidelines on adequate disclosure - Section 15c2 -12 - under- writers must review the Official Statement before purchasing (disseminate information to investors) O • Advertisement/Publications Issuer / Financial Advisor - The Bond Buyer - Local paper Page 16 N SPRINGSTED Municipal Bond Essentials Credit Rating • Purpose Provides an understandable measure of the degree of risk of an issuer's securities. The ratings are used by investors to aid them in making investment decisions. • Rating Agencies - Moody's Investors Service - Standard & Poor's Corporation - Fitch Investors Service Moody's S &P (b) Fitch Highest Aaa AAA AAA Aa AA AA A A A Lowest (Investment Grade) Baa BBB BBB (a) Bonds in the Aa, A and Baa groups which Moody's believes possess the strongest investment attributes are designated by the addition of the numeral one (1). (b) The ratings from "AA" to "BBB" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. • Credit Factors - Debt management - Administrative issues - Financial performance - Economic base /position • What is a credit rating worth? GJ SPRINGSTED Page 17 Municipal Bond Essentials Bond Sale and Settlement Action Participants • Award of Sale Issuer / Financial Advisor - Receipt of proposal (negotiated) or bids (competitive) on sale of issue - Underwriters' compensation • Settlement Issuer / Financial Advisor / Bond Counsel - Preparation of bond transcript, bond printing and receipt of bond proceeds - Receipt of bond record compiling key financial and legal documents of the issue Page 18 SPRINGSTED Municipal Bond Essentials Financing Timetable :: «:: >:<::: >:: »::«:: >: >: Task Name 1 2 3 4 5 6 7 H 12 Staff Provides Financing Needs and Requirements Finance Plan is Formulated Springsted's Recommendations and Bond Counsel Resolution Printing and Mailing Issuer Sets Sale Drafting of Official Statement Review of Draft Official Statement Printing and Mailing Credit Rating /Marketing to Underwriters Bids Taken, Issuer Considers Award Settlement: Closing Papers Processed Bond Proceeds Received y SPRINGSTED Page 19 Municipal Bond Essentials Glossary of Terminology Ad Valorem Tax - [ Latin: to the value added] A tax based on the value (or assessed value) of property. A itra e - Investment earnings representing the difference between interest paid on bonds and the interest earned on purpose and nonpurpose securities in which bond proceeds are invested. The Internal Revenue Code regulates the amount and conditions under which arbitrage on the investment of bond proceeds is permissible and the 1986 Tax Reform Act requires, with limited exceptions, that arbitrage from nonpurpose investments must be rebated to the federal government. Bank Qualified - In general, an obligation is described in this clause when the issuer reasonably expects to issue $10,000,000 or less in tax - exempt obligations during such calendar year. Typically, these "bank- qualified" bonds are more attractive to financial institutions due to the tax treatment, which creates greater competition and may lower interest rates. Basis Point Shorthand reference to 1/100 of 1 percent (0.01 percent). Bond Insurance - Insurance as to timely payment of interest and principal of a bond issue. The cost of insurance is usually paid by the issuer in the case of a new issue of bonds, and the insurance is not purchased unless the cost is more than offset by the lower interest rate that can be incurred by the use of the insurance. Bond Year - An element in calculating average life of an issue and in calculating net interest cost and net interest rate on an issue. A bond year is the number of 12 -month intervals between the date of the bond and its maturity date, measured in $1,000 increments. For example, the "bond years" allocable to a $5,000 bond dated April 1, 1980, and maturing June 1, 1981, is 5.830 [1.166 (14 months divided by 12 months) x 5 (number of $1,000 increments in $5,000 bond)]. Usual computations include "bond years" per maturity or per an interest rate, and total "bond years" for the issue. Call - Actions taken to pay the principal amount of the bonds p rior to the stated maturity date, in accordance with the provisions for "call' stated in the proceedings and the bonds. Callable - Subject to payment of the principal amount (and accrued interest) prior to the stated maturity date, with or without payment of a call premium. Call Premium - A dollar amount, usually stated as a percentage of the principal amount called, paid as a "penalty" or a "premium" for the exercise of a call provision. Closing Date - The date on which a new issuance of bonds is delivered to the purchaser upon payment of the purchase price and the satisfaction of all conditions specified in the bond purchase agreement. Co verage - This is a term usually connected with revenue bonds. The margin of safety for payment of debt service, reflecting the number of times (e.g., "120 percent coverage ") by which annual revenues either on a gross or net basis exceed annual debt service. Page 20 " SPRINGSTED Municipal Bond Essentials Debt Limit - Statutory or constitutional limit on the principal amount of debt that an issuer may incur (or that it may have outstanding at any one time). Debt Service - Principal and interest. Depository - A clearing agency registered with the Securities and Exchange Commission which provides immobilization, safekeeping and book -entry settlement services to its participants. The four registered depositories are The Depository Trust Company (New York), the Midwest Securities Trust Company (Chicago), the Pacific Securities Depository Trust Company (Chicago) and the Philadelphia Depository Trust Company. Di o n - (1) Amount (stated in dollars or a percent) by which the selling or purchase price of a security is less than its face amount. (2) Amount by which the amount bid for an issue is less than the aggregate principal amount of that issue. Joint Managers - Underwriting accounts are headed by a manager. When an account is made up of several groups of underwriting firms that normally function as separate accounts, the larger account is often managed by several underwriters, usually one from each of the several groups, and these managers are referred to as "joint managers." Legal Opinion - An opinion of bond counsel concerning the validity of a securities issue with respect to statutory authority, constitutionality, procedural conformity, and usually the exemption of interest from federal income taxes. Letter Of Credit (LOCI - A security document usually issued by a bank that back - stops, or enhances, the basic security behind a bond. In the case of a direct pay "LOC," the bondholder can request the bank to make payment directly rather than through the issuer. Level Debt Service - The result of a maturity schedule that has increasing principal amounts maturing each year so that the debt service in all years is essentially "level." "Level debt service" is often used with revenue bond issues (and, in a familiar area, in the traditional approach to monthly payments on home mortgages). Maturi y Date - The stated date on which all or a stated portion of the principal amount of a security is due and payable. Maturi y Schedule - The schedule (by dates and amounts) of principal maturities of an issue. Net Direct Debt - Total direct debt of a municipality less all self - supporting debt, any sinking funds, and short-term debt such as tax anticipation notes and revenue anticipation notes. Net Interest Cost - The traditional method of calculating bids for new issues of municipal securities. The total dollar amount of interest over the life of the bonds is adjusted by the amount of premium or discount bid, and then reduced to an average annual rate. The other method is known as the true interest cost (see 'True Interest Cost'). Dated Date (or Issue Datel - The date of a bond issue from which the bondholder is entitled to receive interest, even though the bonds may actually be delivered at some other date. H SPRINGSTED Page 21 Municipal Bond Essentials Notice Of Sale - An official document disseminated by an issuer of municipal securities that gives pertinent information regarding an upcoming bond issue and invites bids from prospective underwriters. Optional Redemption - A right to retire an issue or a portion thereof prior to the stated maturity thereof during a specified period of years. The right can be exercised at the option of the issuer or, in pass- through issues, of the primary obligor. "Optional redemption" may require the payment of a premium for its exercise with the amount of the premium decreasing the nearer the option exercise date is to the final maturity date of the issue. Overlapping Debt - On a municipal issuer's financial statement 'overlapping debt" is the debt of other issuers which is payable in whole or in part by taxpayers of the subject issuer. As an example, a county usually includes several smaller government units and its debt is apportioned to them for payment based on the ratio of the assessed value of each smaller unit to the assessed value of the county. Another example is when a school district includes two or more municipalities within its bounds. In each example 'overlapping debt" is the proportionate share of the county and /or of the school district borne by included subject issuer. Par Value - The principal amount of a bond or note due at maturity. Pa, ra ing Agent - Place where principal and interest are payable. Usually a designated bank or the office of the treasurer of the issuer. 12dicate - A group of underwriters formed for the purpose of participating jointly in the initial . public offering of a new issue of municipal securities. The terms under which a "syndicate" is formed and operates are typically set forth in the "agreement among underwriters." Those terms will establish the pro rata participation of each syndicate member, the methods by which offering prices and other terms of sale will be established, in what priority orders for securities will be taken and confirmed and the joint or several nature of the liability assumed by each member for the purchase of unsold securities. The purpose of a "syndicate" formation is to share the risk of the offering among participating underwriters and to establish a distribution network in which to market the offered securities. One or more underwriters will act as manager of the "syndicate" and one of the managers will act as lead manager and "run the books." A "syndicate" is also often referred to as an "account' or "underwriting account." True Interest Cost - A method of calculating bids for new issues of municipal securities that takes into consideration the time value of money (see "Net Interest Cost'). Trustee - A bank designated by the issuer as the custodian of funds and official representative of bondholders. "Trustees" are appointed to insure compliance with the contract and represent bondholders to enforce their contract with the issuers. Underwriting Spread - The difference between the offering price to the public by the underwriter and the purchase price the underwriter pays to the issuer. The underwriter's profit, expenses and selling costs are usually paid from this amount. Glossary Source: Public Securities Association, Fundamentals of Municipal Bonds. Third Edition. Page 22 SPRINGSTED Supplement Municipal Bond Essentials for � Minnesota Issuers • Supplement to Municipal Bond Essentials An 'obligation" is defined in Minnesota Statutes, Chapter 475, as a promise to pay a stated amount of money at a fixed future date, or on demand, made for the purpose of incurring debt for which funds are not appropriated in the current years budget. A municipal bond is in effect a contract between the issuer and the bond owner. They can be classified by (i) the security behind the bond, (ii) the purpose for which the proceeds of the bonds will be used and (iii) the user of the capital facility financed by the proceeds of the bonds. Bonds by Type of Security General Obligation Bond Chapter 475 defines a general obligation as an obligation that pledges the full faith and credit of the issuing governmental unit to payment of principal and interest. The bond owner correctly understands this to mean that all available assets and resources of the issuer, including the unlimited power to tax, will be used by the issuer to fulfill the contract to pay back the amount of the bond with the amount of interest agreed upon. The security for a general obligation bond is the pledge of those resources and taxing powers. Revenue Bond A revenue bond pledges to pay the bond owner principal and interest only from a specified source of revenues most often from the facility or enterprise financed by the bond proceeds. The issuer gives the owner additional assurances in the bond documents that it will operate the facility efficiently and impose the necessary charges for the use of the facility to insure prompt and full payment of the bond and gives the holder rights to enforce those assurances, or "covenants," as they are known. This type of bond is used typically for self - supporting utilities, such as electric utilities, recreational facilities and municipal liquor stores. Revenue bonds typically also carry higher interest rates than general obligations because of the slightly higher risk of repayment. Normally, "net" revenues are pledged, but a gross revenue pledge is permitted by some statutes. Issuers may also issue tax increment revenue bonds payable solely from the tax increment generated by the TIF financing district, or in some instances even issue sales tax revenue bonds. General Obligation Revenue Bonds Some statutes permit the issuer to pledge the full faith and credit and the revenues of the facility. Presumably, this should result in more favorable interest rates because of the enhanced security, but experience has shown that the FJ SPRINGSTED Page 1 Supplement to Municipal Bond Essentials bond investor looks primarily to the general obligation pledge in analyzing the underlying credit. Other common bonds of this type, although not generally known as such, are general obligation improvement bonds and general obligation tax increment bonds, that pledge special assessments against benefited property or tax increments from a financing district as security. These bonds are viewed by the investor as straight general obligations since the special assessments and increments are roughly equivalent to property taxes in their imposition and collection. Bonds by Purpose Municipal bonds are generally identified by the use of the proceeds, and their titles give an indication of both the purpose and security. Thus a bond payable in whole or in part from special assessments levied to pay for a public improvement will be called a "General Obligation Improvement Bond;" a bond for a new community center may be a "General Obligation Building Bond;" a sewer utility bond, a "General Obligation Revenue Sewer Bond." Grouping an issuer's outstanding bonds in this way is normally done in the issuer's financial reports and in bond offering statements, . providing a useful way of presenting an issuer's overall debt picture. Rating agencies also analyze the debt burden and debt ratios (dollars of debt per capita, valuation, etc.) in terms of the availability and utilization of other revenues to pay general obligation debt. Bonds by User Many issuers in Minnesota have issued bonds to provide direct aid to private persons or corporations. In federal law terms, these are "private activity" bonds. Common examples are industrial development revenue bonds and housing revenue bonds. The bonds are issued for some redevelopment or economic development purpose, and the proceeds are either loaned to private entities or inure to their benefit in one way or another. There usually are no direct financial obligations on the part of the issuer to pay the bonds and if so they do not affect the issuer's debt structure or bond rating. Laws Governing Bonds The Bond Code The basic statute governing Minnesota municipal bonds is Minnesota Statutes, Chapter 475. The principal provisions of Chapter 475 are as follows: Page 2 GJ SPRINGSTED Supplement to Municipal Bond Essentials Debt Limit Municipalities, except cities of the first class and school districts, may not incur debt in excess of 2% of the market value of taxable property in the municipality. The limit is 10% in first class cities and school districts. But subtracted from this overall 2% limit are almost all debt obligations for which some other source of revenue is pledged as security. Thus, improvement bonds, tax increment bonds, utility revenue bonds, pure revenue bonds and similar bonds may be issued without regard to the debt limit. The result is that, with only a few exceptions, the only types of obligations subject to the debt limit are general obligation bonds payable solely from ad valorem property taxes. The legal debt limit has nothing to do with the practical debt limit of a municipality which is the debt burden beyond which the creditworthiness of the municipality is put in question. Voter Approval Another general rule in the bond code is that the issuance of bonds must be approved by a majority of voters voting on the question. But as in the case of the debt limit, a number of exceptions limit this rule to a very few bond issues. The exceptions are: a. bonds to pay a judgment; b. refunding bonds; C. improvement bonds or tax increment bonds where special assessments or tax increments pay at least 20% of the cost of the project financed; d. revenue bonds; e. bonds issued under a charter provision or statute that permits the issuance without an election. The effect of those exceptions is that, in almost all cases, only general obligation bonds payable solely from ad valorem property taxes need be approved by the voters. If a bond election fails, the same question for the same amount may not be resubmitted to the voters for six months, and if it fails a second time, a one -year delay is required. The statute read literally means that a change of $1 in the amount would permit an early resubmission, but general practice requires at least a 5% reduction in amount or a substantive change in the purpose. Public Sale A third general rule riddled with exceptions is that bonds must be sold, after published notice, to the highest bidder on a purely competitive basis. The principal exceptions are: F1 SPRINGSTED Page 3 Supplement to Municipal Bond Essentials a. whenever a law or charter provision permits negotiated (non- competitive) sale; b. bonds sold by an issuer in amounts not exceeding $1,200,000 in any period of 12 consecutive months; C. tax anticipation bonds; d. bonds sold to state or federal agencies; e. pension funding bonds, variable rate bonds and crossover refunding bonds; f. taxable bonds; g. installment sale contracts and lease purchase agreements; and h. bonds issued with the advice and assistance of an independent financial advisor. The last exception covers most municipal bonds issued in Minnesota. But because of the desirability of the competitive bidding process, most financial advisors, in all but the most exotic financings, will advise the issuer to, in effect, obtain competitive offers or proposals. Industrial development bonds, described above, are rarely, if ever, sold competitively. They are, in effect, private financings and the benefitting company chooses its own underwriter to market the bonds. Tax Levies for General Obligations Chapter 475 requires that in the case of general obligations, the issuer must, at the time the bonds are sold (usually in the resolution awarding the sale), levy an irrepealable ad valorem tax for each of the years of the bonds equal to 105% of the principal and interest due in that year. The purpose of the 5% overlevy is to cover possible deficiencies in tax collection. The resolution must be filed with the county auditor who must then levy the tax for the years indicated. If, however, other revenues are pledged as security for the bonds (special assessments, tax increments, utility revenues) the amount of reasonably expected revenues from those sources may be subtracted from the 105% levy. If there is excess revenue in the debt service fund for the bonds (from prepayments, investments or irrevocable appropriations) the issuer may notify the auditor of the excess and request that the levy for the ensuing year be reduced by that amount. Interest Rates The interest rate on a municipal bond (sometimes referred to as the "coupon rate ") is currently not subject to any statutory limitation. (It is possible for a charter to limit rates, but such limits seldom exist.) The rates are determined solely by the market Page 4 N SPRINGSTED Supplement to Municipal Bond Essentials considerations the day the bonds are sold or negotiated. The total interest cost of an issue is the sum of the coupon rates for each maturity year of the issue plus any discount taken or plus any premium paid; the net effective interest rate is the total interest cost divided by the total number of bond years (the weighted average duration the bonds are outstanding); the true. interest cost or rate is the percentage rate at which the total payments of principal and interest are discounted to produce the purchase price of the total issue of bonds. Chapter 475 permits, the sale of an issue of bonds at a price lower than the face amount (par amount) of the bonds. This amount, called "discount," may not exceed 2% of the amount of bonds otherwise authorized to be sold. Discount is simply interest, and in the computation of total interest cost the amount of the discount is added to the total coupon interest. A discount is routinely provided in public offerings of municipal bonds by issuers in order to provide the underwriters who buy the bonds some working capital to cover their sale and administrative costs in marketing the bonds to the ultimate bond owner. Thus, a $1 million offering of bonds may specify that the purchaser must pay not less than $990,000 for the issue, the $10,000 • representing a 1 % discount. One curious aspect of the discount is that in the case of general obligation bonds authorized by the voters the discount amount may be added to the amount of the authorization. Thus, if the voters authorized $1 million, a total of $1,020,000 may be sold, the additional $20,000 of bonds representing the discount. If not fully used by the purchaser, the excess must be placed in the debt service fund. Maturities Minnesota municipal bonds, except private activity bonds, must mature serially over a term not to exceed 30 years, that is, a certain portion of the principal amount of the issue comes due annually. Generally speaking, no amount in a given maturity year may exceed a maturity amount in a previous year ending three years after date of issue by more than five times. Thus, if the first maturity is three years after the date of the issue and is $50,000, no subsequent maturity may exceed $250,000. The law permits, however, the issuer to combine the maturity schedule of a bond issue with another new or outstanding issue, generally payable from the same source of revenues, to comply with this "five times" rule. • Call Redemptions Bonds are normally issued with the issuer retaining the right to prepay the bonds (call for redemption) after GJ SPRINGSTED Page 5 Supplement to Municipal Bond Essentials some specified future date. Issuers find it useful to be able to retire the debt early if possible or to refund the bonds at a more favorable rate, but bondholders need to ensure the benefit of their investment for at least some period of time. Therefore, there is typically an initial "lock -out" period, often ten years, during which the bonds may not be prepaid. Notice to the bondholder is required, and at least 30 days mailed and published noticed is the industry standard although published notice is not required if the bonds are registered bonds. Notice is normally handled by the bond registrar or paying agent at the request of the issuer. The call amount is normally the par amount of the bonds redeemed plus accrued interest to the date of redemption. Refundings Chapter 475 permits issuers to refund outstanding bonds if permitted by the bonds themselves (refunding is another term for refinancing, just like refinancing a mortgage). A refunding may be (i) a current refunding, that is, the refinancing takes place on a date the bonds are subject to redemption; or (ii) an advance refunding, where the refunding takes place well before the redemption date, the proceeds placed in escrow and held until the first redemption date when the refunded bonds are paid. Refundings are done and permitted for a number of reasons, the most common being . to reduce interest costs. The calculation of the amount of savings from a particular refunding is important due to the fact that the savings in real terms is the "present value" of these savings after the costs of issuing the refunding bonds. The concept of present value involves recognizing that $1 today is worth more than $1 five years hence and discounting the value of that future dollar to reflect that the dollar will not be available to generate income until that future date. Lease Purchase Financings Section 465.71 permits municipalities to enter into lease purchase agreements to acquire real or personal property. The lease payments are applied to the purchase price and associated interest cost of acquiring the capital asset. The statute provides that such obligations are not subject to debt limit and no election is required. But the agreement must give the municipality the right to terminate the agreement at the end of any fiscal year during its term by a provision called a "non- appropriation" clause. Thus, a municipality may at any time simply declare that it will not appropriate money in the coming year for the lease payments and the agreement ends. The market for such leases fully understands the risk and analyzes it in terms of the likelihood that a municipality will do such a thing, which Page 6 F1 SPRINGSTED Supplement to Municipal Bond Essentials is small. On the other hand, some vendors routinely include rather onerous remedies in the event of early termination, and the mupicipality should be fully aware of the consequences of non - appropriation. Lease purchases are commonly used for equipment (office equipment motor vehicles, telephone systems), but it is possible to finance major capital expenditures in this way, say a municipal building. If the amount of the transaction is substantial, the lessor may sell certificates of participation (COP's) in the underlying lease. The COP's look like, sound like and are marketed just like municipal revenue bonds, but are not governed by some of the statutory procedures discussed above relating to municipal bonds. G� SPRINGSTED Page 7 Introduction to Springsted 1 t Municipal Bond Essentials History Springsted Incorporated is one of the oldest and largest independent financial advisory firms in the United States. The firm traces its beginnings to the early 1950's, and today employs a full -time staff of 55, including 38.public finance professionals having an average tenure of seven years with Springsted Incorporated. Springsted is employee -owned by the directors of its four divisions. The firm maintains its corporate headquarters in Saint Paul, Minnesota, and additional offices in Minneapolis, Minnesota; Iowa City, Iowa; Milwaukee, Wisconsin; Overland Park, Kansas; and Washington, DC. Springsted is an employee -owned firm. The Directors of our four operating divisions are each equal owners. Two of the four owners are women. Springsted is engaged exclusively in the business of providing advisory services to governmental entities and not - for - profit corporations with respect to the financing of capital and operating needs. The firm does not engage in the underwriting, sale or trading of securities, nor does it serve as an investment counselor or advisor. Therefore, all the experience outlined in this proposal relates to financial advisory . engagements. A charter member of the National Association of Independent Finance Advisors, we are prohibited from participating in interlocking relationships which would compromise our independent advice. Springsted's approach to providing financial advisory services is holistic in nature. We work with our clients to improve their capital improvement programming, to identify new sources of revenue, evaluate pay -as- you -go versus or in conjunction with debt or lease financing. Our skill at crafting debt management policies and innovative financing programs has resulted in many national awards for our clients. Our attention to non -debt issuance services is the catalyst for successful client programs and long -term financial advisory relationships. Springsted brings to market more bond issues than any other financial advisor or investment banker in the nation. Since January 1, 1991 Springsted has served as financial advisor on 1,358 long -term financings covering the spectrum of financing needs. This level of performance has been consistent for many years and coupled with a continuity of staff has assisted in developing the broadest based experience level available in municipal finance today. Our next closest competitor has represented issuers on 319 fewer issues than Springsted. The table below presents a compilation of statistics from Securities Data Company's Municipal Market Analysis, Year -End 1991, Year -End 1992, Year -End 1993 and 1994 Year -to -Date. F1 SPRINGSTED Page 1 Municipal Bond Essentials Financial Advisor National Rankings Long -Term Municipal New Issues Springsted's Ranking by Number of Issues 1/1/91 to 6130/94 Total 1 General Obligation 1 Tax - Exempt 1 General Purpose 1 Taxable 1 New Financing 1 Competitive 1 Refunding 1 Negotiated 9 Revenue 4 The frequency with which we enter the market is evidence not only of familiarity with the financial market, rate setting, and purchase activities, but also rating agencies, credit enhancement providers, registrar and trustee banks, bond counsel and other ancillary service providers that are essential in planning and issuing debt and lease obligations. Behind these numbers lies a wealth of experience in serving a wide variety of clients with diverse financial needs. The table below illustrates the diversity of our experience in a variety of specialty areas. This experience ensures that when Springsted sits down with a client to analyze its particular situation, Springsted can move rapidly to present workable solutions, individually tailored to the needs of the client. The diversity of experience affords the cross - hybridization of ideas and . exposes Springsted personnel to all the latest industry ideas. Our clients can rely on us to serve all their financing needs. Financial Advisor National Rankings Long -Term Municipal New Issues Springsted's Ranking by Number of Issues 1/1/91 to 12/31/93 Economic Development 1 Education 1 Industrial Development 1 Higher Education 1 Housing 4 Solid Waste /Resource Recovery 2 Transportation 3 Water, Sewer and Gas 4 Springsted's staff is called on frequently to provide management services on a special contract basis involving the development of computer cash flow modeling, analyses of debt refunding and defeasance, capital improvement and debt capacity studies, the review of legislative and regulatory proposals affecting clients, and the creation of alternative cost recove ry methods. Page 2 H SPRINGSTED Municipal Bond Essentials Project Feasibility Springsted personnel have frequently participated in collaborative multi - disciplinary efforts to evaluate the financial feasibility of various projects. Drawing upon revenue and expense data supplied by other consultants, we prepare pro forma analysis tailored to the specific financing vehicle to be used to fund the project. In conjunction with bond counsel, we advise on the tax consequences certain business and financial decisions have on the ultimate financing package. This collaborative approach with other project team members assures projects are always moving forward towards the desired end. Project Financing Springsted has extensive experience in developing financing for projects utilizing taxable and tax - exempt financing and various means of encouraging private sector participation. Springsted's experience with the wide range of financing tools allows us to match a project's financing needs with the most appropriate sources of capital. • Once public sector clients have identified projects with a public purpose, we can creatively sort and structure the investment options to assist the project. We can effectively identify the types of risks public agencies are willing to accept should they choose to pursue joint public /private ventures. Springsted has experience with the following financing resources. Financing Instruments General Obligation Bonds Lease Revenue Bonds Sale /Leaseback Bonds Installment Purchase Contracts Certificates of Participation Tax Increment Bonds Special Benefit District Bonds First Mortgage Bonds Sales Tax Bonds Master Lease Agreements Parking Revenue Bonds GJ SPRINGSTED Page 3 Municipal Bond Essentials Technical Assistance Springsted's technical assistance can be divided into two (2) categories: planning and management; and financing process. The breadth of our experience enables us to provide creative solutions to difficult financing problems. Samples of Springsted technical assistance include: Planning and Management • Feasibility and Cash Flow Analysis • Debt Capacity and Management Assistance • Capital Improvement Plan Development • Revenue Resource Analysis • Utility Rates Analysis • Tax Increment Plans • Leasing /Asset Transfers • Refinancing Evaluations • Arbitrage Rebate Reports • Legislative Evaluations • Joint Public /Private Ventures • Private Vendor Negotiations Financing Process • Establish Financial Parameters • Identify and Select Financing Instrument • Develop Financing Plan • Present Formal Findings • Prepare and Distribute Official Statement • Obtain a Credit Rating and /or Credit Enhancement Device • Conduct Sale • Assist with Legal Transcript and • Settlement • Prepare and Deliver Financing Record • Reinvest Proceeds Page 4 N SPRINGSTED AP L ASSp P �Z 2 w Z J w pQ EA MEMORANDUM TO: Mayor Myrna Kragness Councilmember Kathleen Carmody Councilmember Debra Hilstrom Councilmember Barb Kalligher Councilmember Kristen Mann FROM: Gerald G. Splinter, City Manager DATE: January 6, 1995 SUBJECT: Possible Appearance of Brooklyn Community Band Representatives at Open Forum I've been informed that representatives of the Brooklyn Community Band will possibly be appearing at Monday evening's Open Forum requesting additional funding from the City of Brooklyn Center to operate the band. By way of background, the financing of the band was cut from the 1994 Budget by the City Council during its original consideration. The City Council, upon appearance by the band at a similar Open Forum setting, decided to provide a contingency appropriation for the band in 1994. At that time, some members of the Council expressed the opinion this should be the last year for funding for the band. Prior to 1994, the financing of the Brooklyn Community Band was roughly divided between the City of Brooklyn Center, the City of Brooklyn Park, and revenue generated by the Community Band. Attached please find copies of a memorandum which presented the prioritization and recommendations from the Park and Recreation Commission regarding funding requests for contractual services for the 1995 budget dated November 18, 1994. You will note while the Community Band came in with a very high recommendation in the prioritization process, the Park and Recreation Commission did not recommend funding because it was their understanding the City Council, as a part of their decision regarding funding of the band in the 1994 budget intended these contractual services dollars to be primarily used for youth - focused programs. I've also included for your information a copy of the minutes of the Park and Recreation Commission for November 15, 1994, in which they discussed this matter. The final budget adopted by the City Council for the year 1995 does not include funding for the Community Band. There is $5,000 in the 1995 adopted budget for contractual services, and it is my understanding the Council intended that to be for youth activities. Your staff and the Financial Commission have consistently recommended the Council not consider a funding request of this type outside of the regular budget process. Should you have any questions with regard to this matter, do not hesitate to give me a call. CORRECTION interested in seeing what the Planning Commission could come up with, and mentioned it • is a source of pride for Brooklyn Center not to allow billboards. He believed that some regulation as to size and nature, etc. were necessary because someone could abuse that privilege and the whole community would suffer. Mayor Paulson asked what is currently being done to enforce any sign regulations, and the Planning and Zoning Specialist said the City is not taking any overt action at this time. Councilmember Rosene said he thought State Law superseded the jurisdiction of cities, and the Planning and Zoning Specialist said Minnesota statute states there is no size limit for political signs between 60 days before and 10 days after a state general election, otherwise local regulations prevail. Mayor Paulson asked staff to convey to the Planning Commission this is an opportunity to retain the frees speech right and also to keep P g p the community looking nice. There was a motion by Councilmember Rosene and seconded by Councilmember Mann to direct the Planning Commission to take up the issue of signs, including areas such as size, number, type, and length of time for posting. The motion passed unanimously. RECOMMENDATION FROM PARK AND RECREATION COMMISSION TO REQUEST COUNCIL TO RECONSIDER THE 1994 FUNDING CUT FOR BROOKLYN COMMUNITY BAND The City Manager explained there had been a request from the Brooklyn Community Band to continue its funding. He asked if the Council would wish to do so. Councilmember Rosene said he had not realized this specific item had been removed from the budget when cuts were made, and he said he would move to continue funding because there are so many members of the community who participate. Councilmember Kalligher said she thought there were many similar requests from other organizations whose funding was also cut, including several kids' sporting organizations. She recommended tabling this request until there is a policy made on what will or will not be funded and also said the band could increase its own fund- raising activities. The City Manager explained when the Council was in a tight situation to cut some funds, money went to a contingency fund and was to be used for youth activities while cutting adult activities. Councilmember Mann said the band has been part of the community for 31 years which gives historical value. She said she thought cutting that funding was hasty, and perhaps there could be savings on the budget because of overtime staffing charges. 2/28/94 -8 - The City Manager explained the overtime staffing is necessary because events are on • weekends, and equipment hauling and storing cannot be done by lay people, but by licensed City employees. Councilmember Rosene conveyed his regret the band was not contacted in advance of the funding cut so they'd have time to search for funding alternatives. There was a motion by Councilmember Rosene and seconded by Councilmember Mann to reinstate funding for the band for this year. Wayne Schaffran, President of Brooklyn Community Band, said he thought the Council made the budget decision without input from the band; therefore, he provided a packet of information about the band and its activities. He gave a brief overview of the packet and stated all members of the band feel it should continue. He explained the operating budget is $7,4$5, and that 1/3 came from Brooklyn Center, 1/3 from Brooklyn Park, and 1/3 from the band or the Lions clubs. Councilmember Kalligher asked how many residents of Brooklyn Center were in the band, and Mr. Schaffran said there were 13. She asked if the band had any fund- raisers of its own and said she would like to read more about the band and have the Park and Recreation Commission look into this more before making a decision. Mr. Schaffran said the Council should consider the band provides a service to all the . residents because of its performances for nursing homes and the concerts, including concerts in the park. Mayor Paulson suggested the motion be amended to include reinstating funding for this year, directing the Park and Recreation Commission to work along with the Human Rights and Resources Commission to set policy an how to prioritize funding and funding cuts, and directing the band to investigate other funding sources. Councilmembers Rosene and Mann accepted that amendment. Mr. Carl Carlson, a professional musician who got his start in a community band, said the comparison to sports really bothered him because music is not just recreation but an art form. He said musicians cannot just play once a week to be in a band, and the band plays for others, not just for the benefit to the band member. He said Brooklyn Center spends money to train kids in music, but then there is nowhere for adults to use that talent. He said the band is a sort of minor league of music after high school and people get a lot of enjoyment from hearing the band. Councilmember Kalligher said if the Council gives the band $2,450, then everybody else will be asking for it too. She said she is sorry to compare music to sports, but there are other groups that have their own merit that also received cuts. She urged the Council to look at • 2/2$/94 -9- the whole picture rather than looking piece -meal at the requests, especially if nobody knows if there is money in the fund for it. Councilmember Rosene said he is also concerned about precedent but did not see this as precedent setting because the band was funded and had planned on a performance schedule for the year. He joked if there is not $2,450 in the contingency fund, then the City is in trouble. He repeated he is willing to fund the band for this year but not for the next. Mayor Paulson said it is not an either -or situation between the band and other groups, and stated he is aware Councilmember Kalligher has been an advocate for youth sports. But he said he is comfortable with the motion. Councilmember Rosene said in youth sports each athlete chips in to play and asked if the band members do the same. Mr. Schaffran said each member pays $25 to join or $40 per couple. RESOLUTION NO. 94 -33 Member Dave Rosene introduced the following resolution and moved its adoption: RESOLUTION AMENDING THE 1994 GENERAL FUND BUDGET TO PROVIDE FUNDING FOR THE BROOKLYN COMMUNITY BAND The motion for the adoption of the foregoing resolution was duly seconded by member Kristen Mann, and the motion passed unanimously. NORTH METRO HIGHWAY 100 COUNCIL The City Manager explained there has been interest conveyed in forming this Council and he recommended the City give staff ability to fund it. He offered to answer any questions. Councilmember Scott said creating the Highway 100 Council is the only way to see Highway 100 improved. She said in the last 15 years no progress has been made because improvements are proposed but they keep being cut. She said there are drastic needs because of bottle - necking and the overlay is breaking up, and because of the congestion people's safety is in jeopardy. The City Manager presented a Resolution Amending the 1994 General Fund Budget to Provide Funding for North Metro Highway 100 Council, Inc. RESOLUTION NO. 94 -34 Member Celia Scott introduced the following resolution and moved its adoption: RESOLUTION AMENDING THE 1994 GENERAL FUND BUDGET TO PROVIDE FUNDING FOR NORTH METRO HIGHWAY 100 COUNCIL, INC. 2/28/94 _10- Image Campaign Why an Image Campaign Recently the north suburbs including Brooklyn Center have received bad press from some of the major media in the Twin Cities. The media has portrayed Brooklyn Center and other cities which have nothing to offer in the way of business and industry. In addition, most coverage by the Tribune and the TV stations tends to highlight the crime and other negatives within the city instead of the positives. This negative coverage was the impetus for developing a full- fledged image campaign for the city. Representatives from the chamber, the city, the city's ad hoc communications task force, the tourism bureau, the school district, state legislature as well as interested businesses and residents met to discuss this image problem, and collectively decided it was time to start telling the good story about Brooklyn Center. Background Since the fall of 1994, the city has been working with the chamber of commerce and members of the community to prepare an image campaign for the city. Meetings were held with community leaders to see the extent of interest in proceeding with an aggressive image campaign. Based on positive response, the chamber and the city began the initial stages of the program. First, a meeting was held with representatives of the Brooklyn Park "Come Home to the Park" program. These representatives explained how their program began and talked about things that worked and didn't work in their city. Based on this input, the chamber, city staff, and members of the communications task force and the business sector developed a core group to discuss how to proceed with the campaign. The group developed a mission statement and list of goals for the program which were discussed at a larger task force meeting in December. The larger task force also brainstormed slogans for the campaign. Invited to the meeting were all people that expressed an interest in helping with the program.(See list of attendees attached). The core group gathered the information and reworked the mission statement and goals, and presented them at the image task force meeting on January 12. At this point, the group decided to start working on some action items and subcommittees were developed for each goal. Each subcommittee was charged with preparing a plan to begin tackling some projects. The group will then present this information at the next image task force meeting in February. Mission Statement • "The image campaign will inform and educate both residents and nonresident of the quality of life and economic opportunities within Brooklyn Center." page 2 Campaign Goals Goal 1: Generate positive press coverage for the city Many community and city programs do receive positive press. Typically, this coverage is picked up by the neighborhood media including Northwest News SunPost and Cable 12. This is especially true if press releases are developed and distributed regarding the events. Keep in mind it is a lot easier to print a story verbatim than to research and write it. Once in a while, however, the KSTP's and Star Tribunes run local stories as well. However, the larger media tend to focus on the negatives instead of the positives in the city and the suburbs. Provide press releases Thus, an effective way to gain media coverage for local programs and events is to continue to provide the media with as many press releases as possible. These should not only be regarding activities at city hall, but community and business programs as well. To do this, there must be a consistent and aggressive flow of information to the media. Consolidate information To ensure that all forms of media including the city and chamber newsletters, cable programs, etc. have the opportunity to publicize information, there needs to be a central point for all • communications. This information coordinator would then ensure that all forms of media receive press releases and information so that each release gets published in as many forms and in as many media as possible. The coordinator would also consolidate information so that it is easier for the media to understand and publish. Form relationships with media reps Although some media are extremely good at publishing city news, some media could receive multiple press releases every day about positive city programs and still never print them. The theory is... "it's who you know, not what you know." Establishing relationships with media representatives may help give an editor the incentive he /she needs to publicize a specific program. However, establishing this type of relationship is not an easy task and can take a lot of time and energy, and still be to no avail. Goal 2: Empower individuals who live and work in the city of Brooklyn Center to take ownership in their Community Originally, our fear was that if city staff drove the image campaign than it would look like just another ciLy hall program instead of a community program. With the campaign underway, it is apparent that someone needs to take the lead to ensure the continued progression of the program. It shouldn't be forgotten, however, that residents and business professionals need to be an integral part of the campaign for it to succeed both from a commitment and resource level. • page 3 • Community Nights One of the suggested ways that we can solicit input and participation from the community is by holding community nights. These meetings of the masses would be used to discuss what's right in Brooklyn Center and what needs improvement. Also discussed would be how we can better the city and how we can ultimately get positive media coverage of the good things happening in the city. A subcommittee of image campaign task force members has already been established to coordinate community nights. Others who wish to participate on the committee are also encourage to do so. Neighborhood Groups Another way to bring the message to the residents is to meet with neighborhood groups to solicit input and to encourage them to actively participate in the community nights as well as the campaign. To date, a presentation to the Riverwood Neighborhood Association has been made. Additionally, Neighborhood Watch leaders will be personally invited to participate in the campaign as well as in community nights. Special caution will be given to ensure that the image campaign doesn't not conflict with Neighborhood Watch responsibilities and that the two programs compliment each other. In addition, the community services officer who coordinates Neighborhood Watch will be asked to act as a liaison between the task force and watch groups. • City Staff City staff will also be solicited for input regarding the image campaign. Many employees have been with the city for years and as a result know some of its history and have a good idea of what needs to be done. Conversely, many employees are new with the city, and thus, will bring a fresh perspective. Staff meetings will be held to inform employees of the status of the campaign and to seek input. Additionally, a survey will run in BC Briefs in February asking for input. Staff will also be invited to attend community nights and to participate on subcommittees. Most importantly, staff will always know that they are welcome to express any ideas or concerns regarding the program to their department supervisor or to the communications coordinator. Business /Social Club Presentations In addition to soliciting input from neighborhood groups and the residents at large, the image campaign will be taken to business and social club level as well. Presentations will be made at the BC Rotary and Chamber meetings as well as the Jaycees and other civic organizations in the city. As with the others, the purpose of these presentations is not only to inform the group about the image campaign, but to empower them to help the effort, or minimally, to ensure that they use the city as a communications network for getting the message out about positive things happening in their organization or the community. page 4 Goal 3: To nurture a progressive business and residential marketplace Provide information for new and potential businesses Businesses and residents who look to relocate in Brooklyn Center need to get the message that the city is really a perfect place to start and to stay. To date, a new brochure and new resident packet have been developed. However, there is nothing available for business prospects. Thus, a package similar to the new resident packet will be developed to send to realtors and relocation firms, and to businesses seeking relocation in the area. Business and Civic Organizations Another way to nurture the business marketplace is to empower the civic and business organizations to take ownership in their community by developing programs to address some of the city's needs. (See empowering goal above). Open communications between businesses and city There are many things happening in the business community that play a positive role in the city. To make the most of these programs and events there needs to be regular and open communication. By knowing what is going on in the community, we will be better able to coordinate time and resources allowing the business community and the city to get the most "bang for the buck ". This communication will also give us another opportunity to tell our • story to the public through the media, and city and community correspondence. Goal 4: To enhance the visual elements representing the city The media is not the only avenue for enhancing the city's image. City materials and other visual elements also say a lot about the city, especially since they are the first and maybe, the only thing a person sees regarding the city. Thus, we need to take a good luck at the message our visual pieces are portraying and enhance them accordingly. This could include development of a new city logo, establishing city colors and updating city brochures, pamphlets, fliers etc. All of these pieces also need to carry the same look so as not to confuse people or give conflicting messages. Responsibilities The programs highlighted above are just a few ways to start implementing the image campaign. Each goal needs to discussed in detail by the community, the task force and the city, and brought to the subcommittee level for implementation. The subcommittee will then flesh out a comprehensive plan for tackling all the issues that need addressing under these goals. City's part -time communications coordinator page S In addition to the subcommittees working on the internal aspects of the campaign and the image task force working on the overall plan, city staff needs to play an integral part in the campaign to ensure its continuation and to provide the needed coordination. The city's communications coordinator will serve as the liaison between the city and the community for the purpose of the image campaign. The communications coordinator will work with the task force to develop city programs as needed, and will also be the communications link between the city, subcommittees, businesses, etc. In short, the communications coordinator will gather information from all entities and disseminate this information in the best way possible. The communications coordinator will also oversee all city- driven image campaign programs including the city newsletter, new business kits, and other visual elements or enhancements, (i.e. the city's logo). The communications coordinator will also serve as the liaison between all image task force groups, the city and a public relations consulting firm. Consulting firm Although there are image problems within the city, including negative media, there are many other image issues that we may not be aware of. In addition, there may be certain image programs that need aggressive attention and others that can be more subtle. A public relations consultant will research the perceived image of the city and design ways in which we can • enhance or combat some of these perceptions. The consultant will work with the city's communications coordinator and the task force to ensure the implementation of image- enhancing programs by offering innovative, effective and unbiased ways to deal with the image problem in the city. The consultant will also work with (or perhaps be the same as) the public relations consultant for Brookdale the Tourism Bureau or the Heritage r t e Cen o ensure consistenc y and coordination of efforts of all major city entities, and to ensure we don't "recreate the wheel," so to speak. In addition to directing the image campaign task force and city staff towards an effective and on -going image program, the consultant will also generate articles /press releases for the city and serve as the media liaison for the major television networks and daily papers. By using the relationships that they have already established with the major media and by coordinating publicity efforts of all the major players and programs in the city, the pr consultant will be able to gain maximum and positive coverage of the city and its programs and offerings. The consultant will work with the communications coordinator in this effort and together they will hit the major media, the local papers, cable television and all other city and community communication devices. Lastly, the PR consultant will work with the ad hoc communications task force and the communications coordinator to develop a slogan for the image campaign and a new city logo and look for city communication pieces, if needed. Many visual programs are planned for page 6 • 1995 to 1997 including the Brooklyn Blvd. redevelopment program, the painting of city water towers, the development of new street signs, city hall remodeling as well as the development of a business packet for the city. All of these programs contribute to the city's image simply through their visual impact. The consultant will enhance or develop programs, based on their research and experience, that will give all city visuals a cohesive and impressive look which will in turn have a tremendous impact on how residents and nonresidents feel about the city of Brooklyn Center. (Please note that based on the budget allocated for a consultant, the consultant will be required to prepare and distribute a set number of articles for the media each month as well as other specific goals as outlined in their contract. This will enable us to measure their performance.) City Image Campaign Task Force A task force will be established to oversee the activities, programs and spending with regards to the image campaign. The task force will consist of 7 members including representatives from city staff, council, chamber, communications task force, business community, the school district and the real estate sector. Board members will be selected via the same application process as city commission members (i.e. via applications and appointment from the council). • The board will meet monthly at which time the communications coordinator will provide a progress report on the campaign. The board will also be charged with providing direction for the program and for bringing input regarding the campaign and the community to the coordinator. Each member on the board will have a vote in all matters regarding the image program including the allocation of time and money resources. Board members will serve for two years. How will the Campaign be Funded Currently, the city council has allocated $25,000 in 1995 for the development of an image campaign with no funds being disbursed to date. Although these funds will help initiate the program, they will not be adequately ensure the continued progression of the campaign *. As a result, the business community will be solicited by a subcommittee of image campaign task force volunteers and will be challenged with matching the city's contribution. Although image task force members feel that they will be able to generate these funds, they feel that there efforts will be fruitless at this time. They believe that businesses need to see things happening before they will commit time or resources to the campaign. Thus, the task force proposes that we seek approval from city council to use a portion of the allocated $25,000 to hire a consultant to help develop the workplan for a campaign and to begin immediate development and implementation of a media program to aggressively address the negative media coverage *See Brooklyn Park's "Come Home to the Park" 1994 budget attached. page 7 • of the city. With plan in hand, as well as visible e positive press coverage of the image Y P P P g g program, and the city, task force members feel that they will better be able to ask for investments from not only their business, but other organizations as well. What is the Timeframe Upon council approval, the ad hoc communications task force will meet with PR consulting firms and select a firm to help with the program then submit a recommendation for council approval. The consultant will then work with the communications coordinator and the image task force to develop a plan for the campaign at the same time that they start drafting and distributing positive articles about the city to the press. The consultant will also immediately begin meeting with Brookdale, BRW (regarding Brooklyn Blvd. redevelopment) and others in the city to develop the plan and to begin coordination of the visual elements of the plan. Community nights as well as city staff meetings will be held in the spring to inform the community and city staff about the campaign and to gain input and volunteers from these groups. This input will then be massaged into the plan. Community nights will also be used as another avenue for educating potential contributors about the program. For any image campaign to be successful, it must be a process not a one -time event. Thus, the • program will be kicked off this spring with efforts continuing indefinitely. Consulting help will be sought for 1995 only, and may be considered for 1996. IMAGE CAMPAIGN TASK FORCE AS OF 1/26/95 Scott Kline, Chief of Police Kathy Flesher Linda Smith Brooklyn Center Police Dept. Brooklyn Center Parks and Rec. Brookdale Center 6301 Shingle Creek Parkway 6301 Shingle Creek Parkway 1108 Brookdale Center B=oklyn Center, MN 55430 Brooklyn Center, MN 55430 Brooklyn Center, MN 55430 Tim Mahoney Rod Snyder Kathy Kolbo Mahoney Broadcast Media 6408 Willow Lane U.S. West 5001 Drew Avenue North Brooklyn Center, MN 55430 200 S. 5th Street #395 Brooklyn Center, MN 55429 Minneapolis, MN 55402 Lisa Kramer Dawn Sommers Terri Swanson, Communications Ryan Companies 5315 Lyndale Avenue North City of Brooklyn Center 7500 Flying Cloud Dr., #135 Brooklyn Center, MN 55430 6301 Shingle Creek Parkway Eden Prairie, MN 55344 Brooklyn Center, MN 55430 Phil Cohen Frank Slawson Julie Doth 5501 Humboldt Avenue North Marquette Bank Brookdale North Metro Convention and Brooklyn Center, MN 55430 5620 Brooklyn Boulevard Visitors Bureau Brooklyn Center, MN 55430 6155 Earle Brown Drive Brooklyn Center, MN 55430 Myrna Kragness Jody Brandvold Dennis Morrow 3401 63rd Avenue North 5538 Colfax Avenue North ISD No. 286 Brooklyn Center, MN 55429 Brooklyn Center, MN 55430 Brooklyn Center High School 6500 Humboldt Avenue North Brooklyn Center, MN 55430 Wall Tony Kuefler Ritchie Miller 7601 Kentucky Avenue North, 5943 Abbott Avenue North 5120 Lilac Drive North #203 Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 Brooklyn Park, MN 55428 Don Kramer Bob Peppe Phillip E. Gray 7215 Fremont Avenue North 6713 Toledo Avenue North 6919 Regent Avenue North Brooklyn Center, MN 55430 Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 Karen L. Youngberg Roxana Benjamin Joyce Ellis 5419 Girard Avenue North Northwest News 7137 Halifax Avenue North Brooklyn Center, MN 55430 7946 Zane Avenue North Brooklyn Center, MN 55429 Brooklyn Park, MN 55443 Ray Ditter Brad Hoffman Gerald G. Splinter, City Manager 6053 Emerson Avenue North City of Brooklyn Center City of Brooklyn Center Brooklyn Center, MN 55430 6301 Shingle Creek Parkway 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Brooklyn Center, MN 55430 Doerfler Charles and Norma Bell Todd Paulson, Mayor NWIhwest News 6440 Willow Lane City of Brooklyn Center 7946 Zane Avenue North Brooklyn Center, MN 55430 3216 Poe Road Brooklyn Park, MN 55443 Brooklyn Center, MN 55429 Councilmember Barb Kalligher Representative Phil Carruthers Debra Hilstrom 5548 Girard Avenue North 7109 Unity Avenue North 3509 66th Avenue North Brooklyn Center, MN 55430 Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 i Mary Welch Councilmember Dave Rosene Councilmember Celia Scott Brooklyn Center Chamber of 7113 Fremont Avenue North 5509 Lyndale Avenue North Commerce Brooklyn Center, MN 55430 Brooklyn Center, MN 55430 6205 Earle Brown Drive Brooklyn Center, MN 55430 Councilmember Kristen Mann Bob Hock Kathleen Carmody 5415 E. Twin Lake Blvd. 5531 Halifax Avenue North 7024 Knox Avenue North Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 Brooklyn Center, MN 55430 Jim Clouser Eric Prestegaard Angus Bennett Dayton's Sears Marquette Bank Brookdale 1100 Brookdale 1297 Brookdale 5620 Brooklyn Boulevard Brooklyn Center, MN 55430 Brooklyn Center, MN 55430 Brooklyn Center, MN 55429 Bernie Gaffney Joseph Strass Sarah Nelson 5918 Upton Avenue North North Metro Mayors North Metro Mayors Brooklyn Center, MN 55430 8525 Edinbrook Crossing 8525 Edinbrook Crossing Brooklyn Park, MN 55443 Brooklyn Park, MN 55443 lerie and Jay Nordstrom Jim Sullivan Amy Gonyea 4820 - 69th Avenue North 3501 - 53rd Place 6925 Humboldt Avenue North Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 Brooklyn Center, MN 55430 Beth Kunz Phillip Roche 7256 Unity Avenue North 5301 Brooklyn Boulevard Brooklyn Center, MN 55429 Brooklyn Center, MN 55429 COME HOME TO THE PARK c:%123n4VVVARK1294.WK4 STATEMENT OF REVENUES AND EXPENDITURES 25- don -95 DECEMBER 31, 1994 MONTH OF YEAR TO DATE -_ ---- DECEMBER, 1994 - --------- - -- DECEMBER 31,1994 --- - - ----- - City Donation City Donation 7/1-12/31 Direct In -Kind fund Total Direct In -Kind fund Total Budget DONATIONS EDA Contribution 0 8,808 0 8,808 46,171 46,171 ,, '� I 6,000 Contributions and Donations 0 - 0 - , 2,022 - 2,022 _ __ - _ 183 _- _ _37,819_ 38,002_ TOTAL REVENUES 0 8,808 2,022 10,830 183 46,171 37,819 84,173 42,000 EXPENDITURES Ifj) COW W ►IcAv. 4c Personal Services •- 0 3,808 0 3,808 15,233 15,233 18,100 Supplies ��xo eh , 00 172 0 0 172 172 114 2,177 2,463 0 Professional Services 0 0 3,475 3,475 1,766 17,120 18,886 7,450 Other Services fIV9.fe. QA U 141 v� 0 0 1,000 1,000 1,036 1,036 8,525 Contractual Services (PR) l �i,.,.� 0 5,000 0 5,000 29,000 29,000 500 Meetings/Travel G'1� 0 0 385 385 58 1,061 1,119 1,575 Furniture /Office Equipment 0 0 0 0 2,280 2,280 0 Other Miscellaneous Costs 0 _ 0 0 _ 0 _ -_ -` _ - -_ _ - 0 - 0_ _ _ 0_ 3,300 TOTAL EXPENDITURES 172 8,808 4,860 , 13,840 _ - _ - - 172 _46,171 23,67 70,017 39,450 EXCESS REVENUES OVER EXPENDITURES (172) 0 (2,838) (3,010) 11 0 14,145 14,156 2,550 OTHER INCOME Interest on savings 0 0 0 0 4 4 TOTAL REVENUES OVER EXPENDITURES (17 2) _ 0 ` (2 838 _ 3 15 _ 0_ , 14,145 ^ _ 14,160 _ _ 2,550 • � � � �'�-�u � � oC '= V..ti�c't --�Z� �,�.) ��t ►r �7 ��.�. `� � i U � !�11 ri I)�.Li C�� C(. I � ci,t`,'%r;` r i j)1 ,,' r' c - I - }v�a�tc�:�� r u- 'yT .