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<br /> Page 3 <br />PARAMETER LIMITS: Pursuant to the Parameters Resolution to be considered by the Council on April 27, 2020, <br />the authority to award the sale of the Bonds has been delegated to the City’s Mayor and <br />Administrator (the “Pricing Committee”), subject to the following parameters: <br /> the principal amount of the Bonds may not exceed $5,000,000, not including the <br />amount of any premium received and, <br /> the true interest cost may not exceed 4.00%. <br />The final determination will be made by the Pricing Committee, in consultation with the <br />City’s Municipal Advisor, Baker Tilly Municipal Advisors (Baker Tilly MA). <br />SECURITY AND <br />SOURCE OF <br />PAYMENT: <br />The Bonds will be general obligations of the City, secured by its full faith and credit and <br />taxing power. Net revenues of the City’s Water Fund and Trunk Fund will be used to pay <br />the debt service on the Bonds as it becomes due; however, net revenues of the Trunk <br />Fund will not be pledged. <br />STRUCTURING <br />SUMMARY: <br />In consultation with the City, debt service on the Bonds has been structured with <br />approximately level annual debt service requirements for a term of 15 years. <br />SCHEDULES <br />ATTACHED: <br /> <br />Schedules attached for the Bonds include (i) sources and uses of funds, (ii) debt service <br />schedule given the current market, and (iii) an aggregate debt service schedule for the <br />City’s existing and estimated water fund debt. <br />RISKS/SPECIAL <br />CONSIDERATIONS: <br />The outcome of this financing will rely on the market conditions at the time of the sale. Any <br />projections included herein are estimates based on current market conditions. <br />The City will need to continue to monitor its water fund to ensure that water fund revenues <br />and connection fees are generating sufficient net revenues to cover the debt service on <br />the City’s water fund debt. <br />SALE TERMS AND <br />MARKETING: <br />Variability of Issue Size: A specific provision in the sale terms permits modifications to the <br />issue size and/or maturity structure to customize the issue once the price and interest <br />rates are set on the day of sale. <br />Prepayment Provisions: Bonds maturing on or after February 1, 2030 may be prepaid at <br />a price of par plus accrued interest on or after February 1, 2029. <br />Bank Qualification: The City does not expect to issue more than $10 million in tax-exempt <br />obligations that count against the $10 million limit for 2020; therefore, the Bonds are <br />designated as bank qualified. <br />Premium Pricing: Any excess proceeds generated as original issue premium or unused <br />discount will be used to reduce the principal amount of the borrowing. <br />POST ISSUANCE <br />COMPLIANCE: <br />The issuance of the Bonds will result in post-issuance compliance responsibilities. The <br />responsibilities are in two primary areas: (i) compliance with federal arbitrage <br />requirements and (ii) compliance with secondary disclosure requirements. <br />Federal arbitrage requirements include a wide range of implications that have been taken <br />into account as this issue has been structured. Post-issuance compliance responsibilities <br />for this tax-exempt issue include both rebate and yield restriction provisions of the IRS <br />Code. In general terms the arbitrage requirements control the earnings on unexpended <br />bond proceeds, including investment earnings, moneys held for debt service payments