02-12-2014 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL FEBRUARY 12, 2014 would not require an increase in the property tax levy or in water and sewer rates. Debt service payments would be funded from water and sewer depreciation that is already provided for in our water and sewer rates. The City currently funds $300,000 in depreciation each year, and the debt service on the bonds would be just over $230,000. This would leave almost $70,000 that could be used for capital projects plus the existing fund balances. The Administrator noted that the City has used these dollars to fund the City's share of single - frontage watermain improvements, inflow and infiltration improvements, lift station repairs, etc. He indicated that the City does not have a lot of pressing capital projects at this time. The Administrator indicated that he was confident that the City was very strong financially and would continue to be over the next 20 years even with this project. He also indicated that the City will have a Public Works /Parks project that it can be proud of Based on this information, the Council had authorized an increase in the bonding for this project at their special meeting of February 7111 . Blesener again commented that the debt service on these bonds will not require an increase in the City's debt levy nor an increase in water and sewer rates. At this point in the meeting, Mark Ruff, Ehlers & Associates, appeared before the Council to present the results of the bond sale. Ruff provided background information on the sale, noting that when a city considers a bond issue, it must have State statutory authority to issue the debt. In the case of this project, the City undertook the capital improvement plan process to issue $2,750,000 in bonds, and Ruff reported on the process involved given that capital improvement bonds are subject to reverse referendum. He noted that the City had the ability to issue Water & Sewer Bonds for the entire project, but noted that the Council wanted the feedback of the community on the project as well as the flexibility that Capital Improvement bonds provides. Ruff reported that as a result of the outcome of the design review committee and the size of the facility proposed at 26,070 square feet, the bond issue has been increased from $2,570,000 to $3,400,000. Of that bond issue, $2,570,000 will be G.O. Capital Improvement Plan Bonds and $830,000 will be G.O. Water & Sewer Bonds. Ruff noted that repayment of the Water & Sewer portion of the bonds must occur with water and sewer funds, and the use of water and sewer depreciation dollars qualifies in this regard. Ruff reported that in preparation for the bond sale, the City had Standard & Poor's review its bond rating. Ruff reported that as a result of the bond rating review, he was pleased to announce that Standard & Poor's 5