10-08-2018 Council Meeting Packet

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Page 3 Lake Drive Utility Portion – Water utility improvements associated with the Lake Drive Project. AUTHORITY: Statutory Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 444 and Section 475.58, Subd. 3. Statutory Requirements: Pursuant to Minnesota Statutes, Section 475.58, Subd. 3, the City can issue bonds for street reconstruction projects in accordance with an approved 5- year street reconstruction plan and in compliance with the public hearing requirements. The City has fulfilled these requirements. As part of the City Council’s Resolution No. 17-54, Approving Five Year Street Reconstruction Plan and Preliminary Approval of the Issuance of Street Reconstruction Bonds, a not-to-exceed principal amount of $5,124,000 was established to finance the Street Reconstruction Portion. Pursuant to Minnesota Statutes, Chapter 444 and the resolution awarding the Bonds, the City will covenant to maintain rates in an amount sufficient to generate revenues to support the operation of its water and sewer utility funds (the “Utility Funds”) and to pay debt service. The City is required to annually review the budget of their Utility Funds to determine whether current rates and charges are sufficient and to adjust them as necessary. In addition to the West Shadow Utility Portion and Lake Drive Utility Portion of the Bonds, the City currently has three other bond issues outstanding payable from the City’s water utility funds. The West Shadow Utility portion will be the only portion of any outstanding bond issue payable from the City’s sewer utility funds. The table below shows net revenues available to pay debt service from the Utility Funds based on calendar year ended December 31, 2017 and the projected debt service payable from utility revenues, including the West Shadow Utility Portion and Lake Drive Utility Portion of the Bonds.