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WS – Item 6 WORK SESSION STAFF REPORT Work Session Item No. 6 Date: September 5, 2017 To: City Council From: Sarah Cotton, Finance Director Re: Prepay General Obligation Improvement Note of 2009 Background In October 2009, the City of Lino Lakes approved a Joint Powers Agreement (JPA) with Anoka County for the reconstruction of the 35E/CSAH 14 Interchange. The city’s share of the project was financed through the issuance of a $3,695,000 General Obligation Improvement Note payable to Anoka County over 15 years. The debt service payments on the note were to be paid by special assessments to benefitting property owners. Over 80% of the proposed assessments were deferred due to green acres, senior citizen, or unplatted/undeveloped land deferrals. Because a majority of the assessments were deferred, the City’s municipal state aid street funds were used as an interim funding source to cover debt service until deferred assessment amounts were received. To date, the City has collected approximately $2.1M in current and deferred assessments. In addition, $1,050,783 of municipal state aid street funds has been utilized to cover debt service on the notes. The City note includes an optional redemption provision in which the City may pre-pay the note in whole or in part on any date. The City exercised this provision in part in 2014 when approximately $1.6M in deferred assessments was paid. The current principal balance on the note is $955,000. Total debt service remaining is $1,060,339.77, which includes $51,270 of interest and $54,069.77 of administrative fees payable to Anoka County for financing the debt. Staff is requesting council consideration to prepay the note utilizing municipal state aid street funds. The city will realize approximately $100,000 in savings. The municipal state aid streets fund will be paid back as deferred assessments are received. Requested Council Direction Authorize prepayment of General Obligation Improvement Note of 2009. Attachments None