05-26-1998 EDA Packet - Laserfiche WebLink

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Lino Lakes Economic Development Authority May 20, 1998 (c) Economic Life (d) Federal Reimbursement Regulations 10. Continuing Disclosure 11. Attachments months until all proceeds are spent. We recommend the EDA select the penalty option as it will be more cost effective than rebate if the money is not spent as rapidly as expected. The average life of the Bonds cannot exceed 120% of the economic life of the projects to be financed. The economic life of the facility exceeds 20 years. This issue is within the economic life requirements. Federal reimbursement regulations require the EDA to make a declaration, within 60 days of the actual payment, of its intent to reimburse itself from expenses paid prior to the receipt of bond proceeds. It is our understanding the EDA has taken whatever actions are necessary to comply with the federal reimbursement regulations in regards to the Series 1998A Bonds. The new SEC rules require the City, as the obligated party, to undertake an annual update of its Official Statement information and report any material events to the national repositories. Springsted currently provides continuing disclosure services to the City of Lino Lakes. An amendment for this issue has been provided to EDA staff. • Sources and Assessments • Debt Service Schedule • Terms of Proposal DISCUSSION Proceeds of this issue and other funds on hand will finance the construction cost of the proposed Civic Complex. The EDA will enter into a lease agreement with the City whereby the City will commit to lease the facility at rental rates equal to the debt service on the Bonds. Since this will be an annual appropriations lease, the City Council must appropriate fundseach year in its budgetory process. Failure to appropriate such funds would constitute an evidence of default which would have a serious negative impact on the City's credit rating and its ability to access the capital markets in the future. Pursuant to legislation enacted in 1996, since these obligations are secured by a promise to pay by the City, the obligations will be included in the net debt calculation of the City. The net debt limit is equal to 2% of the City's current market value of $625,403,650 providing a net debt capacity of $12,508,073. The City will have a remaining debt capacity of $7,158,073 after these bonds are issued. The City currently has no other debt subject to the debt limit. Page 3