10-24-2016 Council Packet - Laserfiche WebLink

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- 5 - THE SERIES 2016A BONDS Authority and Purpose The Series 2016A Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475. The proceeds of the Series 2016A Bonds will be used to finance improvements to the City’s water system. Sources and Uses of Funds The composition of the Series 2016A Bonds is estimated to be as follows: Sources of Funds: Principal Amount $1,420,000 Total Sources of Funds $1,420,000 Uses of Funds: Deposit to Project Fund $1,379,880 Costs of Issuance 28,050 Allowance for Discount Bidding 12,070 Total Uses of Funds $1,420,000 Security and Financing The Series 2016A Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge net revenues of its water utility for repayment of the Series 2016A Bonds. The City does not anticipate the need to levy taxes for repayment of the 2016A Bonds. Pursuant to Minnesota Statutes, Chapter 444, and the Resolution awarding the sale of the Series 2016A Bonds, the City will covenant to impose and collect charges for the service, use, availability and connection to the water utility to produce net revenues in amounts sufficient to support the operation of the water utility and to pay 105% of debt service on obligations to which it has pledged its water utility revenues, including the Series 2016A Bonds. The City is required to annually review the budget of the water utility to determine whether current rates and charges are sufficient and to adjust such rates and charges as necessary. THE SERIES 2016B BONDS Authority and Purpose The Series 2016B Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. The Series 2016B Bonds have been structured as a current refunding, and are being issued to achieve debt service savings. The proceeds of the Series 2016B Bonds will be used to redeem the February 1, 2018 through February 1, 2021 maturities (the “Series 2005A Refunded Maturities”) of the City’s Taxable General Obligation Improvement Bonds, Series 2005A, dated November 1, 2005 (the “Series 2005A Bonds”). It is anticipated that the Series 2005A Refunded Maturities will be called and prepaid at a price of par plus accrued interest on February 1, 2017, which is within 90 days of settlement of the Series 2016B Bonds.