06-13-2012 Council Agenda - Laserfiche WebLink

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Wye .S S Wana €a MAYOR nal Blcscner COUNCIL Rick Montour John Reis Michael McGraw Shelly Boss 515 Little Canada Road, Little Canada, MN 55117-1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson www. ci.little- canada.mn.us MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Joel Hanson, City Administrator DATE: June 8, 2012 RE: PIR Bonds of 2007A Back in 2007, we issued Public Improvement Revolving Fund bonds to finance the relocation of Viking Drive and the assessable portion of other public improvements. The bonds became callable February of this year and with the dramatic drop in interest rates, it is a candidate to be refunded or for us to simply pay off the remaining balance given we can't earn interest at the rates we are paying. I've attached a spreadsheet that gives a quick comparison of our options. I believe paying off the bonds will provide us with a slightly higher return that a refinancing. Given a lot of investments have been called, we have plenty of cash to pay off the remaining $1.37 million. (It is essentially making an investment in ourselves versus purchasing some other instruments. I have talked with Rusty Fifield of Northland Securities about this process. He is double - checking on our options for investing funds if we choose the refinance option to make sure I'm not being too aggressive in my assumptions. (If I am, the payoff option becomes stronger!) I will have a final recommendation available for Wednesday's meeting. To call the bonds, we have to provide 30 days written notice. The next payment date is August Ii1, so it would be nice to be ahead of that.