2016-116 Council Resolution - Laserfiche WebLink

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�.. AUTHORITY: The 2016B Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. SECURITY AND SOURCE OF PAYMENT: STRUCTURING SUMMARY: SCHEDULES ATTACHED: RISKS/SPECIAL CONSIDERATIONS: SALE TERMS AND MARKETING: The 2016B Bonds are a general obligation of the City, secured by its full faith and credit and taxing power. In addition, the City will pledge special assessments against benefited properties as previously pledged to the 2005A Bonds. The City will provide the estimated future assessment collections prior to the sale of the 2016B Bonds. The City expects that assessments will be sufficient to pay 105% of the debt service on the 2016B Bonds and does not anticipate the need to levy general ad valorem tax levies. On February 1, 2017, the call date of the 2005A Bonds, the City will (i) make their regularly scheduled principal and interest payment due on the 2005A Bonds in the amount of $470,117.50 with previously collected assessments and (ii) use proceeds to of the 2016B Bonds to redeem the remaining maturities of the 2005A Bonds. Each year's collection of assessments will be used to make the interest payment due on August 1 in the collection year and the principal and interest payment due on February 1 in the following year. In consultation with the City the 2016B Bonds have been structured with a term matching that of the 2005A Bonds to achieve approximately level annual savings. Based on current interest rate estimates, the refunding transaction is projected to result in savings averaging approximately $32,925 per year. This results in future value savings of approximately $135,138 with a net present value benefit to the City of $130,682. These estimates are net of the costs associated with the refunding. Schedules attached for the 2016B Bonds include a refunding summary, debt service schedule given the current interest rate environment, debt service comparison and debt service to call and to maturity. The outcome of this financing will rely on the market conditions at the time of the sale. Any projections included herein are estimates based on current market conditions. Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Based on the short duration of the 2016B Bonds, and to avoid possible negative pricing impacts, the 2016B Bonds will not be subject to redemption prior to their stated maturities. Bank Qualification: Does not apply to taxable issues. Springsted Page 5