12-26-1990 Council Agenda - Laserfiche WebLink

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Some other key points to consider when reviewing this material are as follows: *Approximately 1 1/2 years are knocked off the debt service schedule for the four issues considered under Scenario #3. *Average annual tax savings are approximately $37,000 over the remaining life of the bond issues under Scenario #4. *The four issues considered are 1981 GO Revenue Bonds, the 1984 GO Improvement Bonds, the 1983 GO Improvement Bonds, the 1985 Advanced Refunding Bonds, and the 1986 GO Improvement Bonds. *Scenario #3 is the only one legally possible at this point in time and due to the fact that Minnesota Law requires that an advanced refunding pass the 3% debt reduction test. In Scenario #3, the test equals 3.25%. In Scenario #4, you will note that only a 2.86% level is attained. (It should also be noted that further declines in interest rates could make Scenario #4 possible. The obvious caution is what will happen to interest rates due to the Mid -East crisis.) I will be discussing this matter with Bob Voto prior to Wednesday night's meeting. We will also be evaluating initial use of the $1 million of funds on hand versus continuing to invest those and reducing levies by the use of those investment proceeds. Brad Farnham and Ted Brownell of Juran & Moody will be present at Wednesday's meeting to discuss this situation further. Depending on my conversation with Mr. Voto, we may be prepared to recommend a course of action for this restructuring. At this point in time, Scenario #3 is the best economic decision the City can make for the long -term benefit of the taxpayers based on the information presented. However, other factors may effect the ultimate determination! Page 34