05-10-2021 Council Packet - Laserfiche WebLink

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Page 2 PURPOSE: Proceeds of the Bonds will be used to finance costs of various street reconstruction projects as identified in the City’s 5-Year Street Reconstruction Plan (2020-2024). AUTHORITY: Statutory Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 475, Section 475.58 (subd. 3b). Statutory Requirements: The City must have a 5-Year Street Reconstruction Plan and comply with the public hearing requirements. The City previously completed these requirements with a public hearing held on June 22, 2020 and the 30-day petition period expiration on July 23, 2020. SECURITY AND SOURCE OF PAYMENT: The Bonds will be a general obligation of the City secured by its full faith and credit and taxing power and paid from ad valorem property taxes. The City will make their first levy for the Bonds in 2021 for collection in 2022. The February 1, 2022 interest payment comes due prior to the first full anticipated collection of taxes and will be paid from capitalized interest included in the principal amount of the Bonds. Each year’s tax collections will be used to make the August 1 interest payment due in the collection year and the February 1 principal and interest payment in the following year. STRUCTURING SUMMARY: In consultation with City staff, the Bonds have been structured with a repayment term of 10 years with an approximately level debt service payments. SCHEDULES ATTACHED: Schedules attached for the Bonds include (i) sources and uses of funds; and (ii) estimated net debt service, given the current interest rate environment. RISKS/SPECIAL CONSIDERATIONS: 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 SALE TERMS AND MARKETING: 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: Bonds maturing on or after February 1, 2030 may be prepaid at a price of par plus accrued interest on or after February 1, 2029. Bank Qualification: The City does not expect to issue more than $10 million in tax-exempt obligations that count against the $10 million limit for this calendar year; therefore, the Bonds are designated as bank qualified. Post Issuance Compliance POST ISSUANCE COMPLIANCE: The issuance of the Bonds will result in post-issuance compliance responsibilities. The responsibilities are in two primary areas: (i) compliance with federal arbitrage requirements and (ii) compliance with secondary disclosure requirements. Federal arbitrage requirements include a wide range of implications that have been taken into account as this issue has been structured. Post-issuance compliance responsibilities for this tax-exempt issue include both rebate and yield restriction provisions of the IRS for this Code. In general terms the arbitrage requirements control the earnings on