07-09-1986 Council Agenda - Laserfiche WebLink

Home Browse Search

f`tf l i hil league g of minnesota cities LEAGUE OF MINNESOTA CITIES PROPOSED INFRASTRUCTURE POOL GENERAL INFORMATION The League of Minnesota Cities intends to create a League Infrastructure Pool to assist cities in meeting their capital financing needs for the next three years. Objectives The pool is intended to: 1. Create a source of funds for most cities to borrow for long -term capital projects at interest rates lower than those they could obtain if they used traditional methods. 2. Avoid the restrictive arbitrage provisions contained in pending federal tax reform legislation, even if loans are originated after September 1, 1986. It is expected this legislation will require a rebate of the excess of earnings on bond proceeds above the yield on bonds issued. 3. Create a way for cities to borrow money for purposes for which they may no longer be able to borrow after September 1, 1986, because of pending federal legislation on tax - exempt bonds. This legislation is expected to either eliminate or restrict certain traditional purposes, such as tax increment financing. 4. Make it easier for many smaller cities to borrow money for capital financing needs. 5. Minimize costs of issuance which may be relatively high on smaller individual bond issues. The Pool Long -term, tax - exempt bonds for the pool are expected to he issued prior to September 1, 1986. The bonds initially will be issued in variable interest rate form. Variable rate bonds will be converted to fixed rate bonds as the pool purchases fixed rate city bonds. The principal and interest on the bonds will be guaranteed by a municipal bond insurer rated "triple A ". The insurer will approve the city bonds following receipt of city bond applications. The amount of the pool's bond issue will be based upon the results of the survey attached. 01`; ,tvc`nuei r'; i;.;t„ s:. c. p: ipi. moll u )t.; 15 55 1 C:11 (G 1 21 2217- 5600 1