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c '4 r 2;414 `Va7naaa <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484 -2177 / FAX: (612) 484 -4538 <br />October 4, 1996 <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Joel R. Hanson, City Administrator <br />RE: Authorization for Notice of Call of $200,000 G.O. <br />Tax Increment Bonds of 1988 <br />MAYOR <br />Michael I. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim LaValle <br />Steve Morelan <br />Bob Pedersen <br />ADMINISTRATOR <br />Joel R. Hanson <br />Attached is a resolution which will authorize the call of the <br />$70,000 of remaining principal ($35,000 in 1996 and $35,000 in <br />1997) for the 1988 G.O. Tax Increment Bonds. The coupon rate is <br />10.00 %. It is my opinion that the City's money is best managed <br />by calling in the outstanding principle to complete the pay off <br />of this issue. The basis for this opinion is that the interest <br />rates we are paying on this debt are higher than what we can earn <br />by reinvesting our funds. Given the fact this is a tax increment <br />issue, there will be no impact on our annual debt service levy. <br />Any dollars saved will be available for other eligible <br />development district program expenses. <br />Should you have any comments or questions regarding this matter, <br />please let me know. <br />Page 13 <br />