10-17-91 Council Workshop Minutes

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MINUTES CITY COUNCIL OCTOBER 17, 1991 *The 12/1/94 and 12/1/95 maturities of the G.O. Improvement Bonds of 1963 will be called on 12/1/91. *The 1/1/96 maturity of the G.O. Refunding Bonds of 1985 will be called on 1/1/91. *Tax levies of 1983 and 1985 bonds will be further adjusted in collection years 1992 and 1993 based on the call of later maturing principal. *The G.O. Storm Sewer Bonds of 1986 will be advance refunded for savings as well as for restructuring considerations. The City Administrator pointed out that the bond coupons that would be called are at rates ranging from 8.20% to 8.70%. Lower current interest yields are part of the rational for calling in these coupons. The Administrator also pointed out that the 1986 Storm Sewer bond issue is structured so that primarily interest is being paid in the initial years, with very little reduction of actual debt. By the refunding proposed, principal will be paid earlier and at a lower rate, thereby reducinq tax levies needed to retire the debt. Blesener pointed out the City's aging infrastructure system, and suggested that the cash-on-hand in some of these bond issues gives the City a reserve fund for future infrastructure replacement. Blesener suggested that this is an issue that should be discussed at the upcoming goal-settinq session. The City Administrator pointed out that he began discussions with Springsted about debt restructuring about a year ago. However, at that time the financial climate was such that a restructuring would not have been beneficial to the City. The Administrator outlined the goals that he felt would be met by a restructuring at this time. Those are: *Reduction and stabilization of future tax levies; *Retention of cash balances for future infrastructure replacement; *Clean-up of the storm sewer bond to push debt forward while making better use of the City's money. Page 2