05/22/2006 Council Packet - Laserfiche WebLink

Home Search

• AGENDA ITEM 2A & B STAFF ORIGINATOR Al Rolek MEETING DATE May 22, 2006 TOPIC Consideration of Resolution 06 -85 Providing For The Issuance And Sale Of Approximately $2,710,000 General Obligation Tax Abatement Bonds, Series 2006A and Resolution 06 -86 Providing For The Issuance And Sale Of Approximately $570,000 General Obligation Utility Revenue Bonds, Series 2006B VOTE REQUIRED BACKGROUND Simple Majority The City Council has entered into an agreement to partner with the YMCA to build a facility in the Legacy at Woods Edge development. Through this agreement the City is donating land and infrastructure to the YMCA and will contribute $2,350,000 toward the construction of the facility. The YMCA and the City broke ground on this facility on May 10 of this year. To finance the cash contribution the City Council has discussed several options and has decided to issue and sell General Obligation Tax Abatement bonds. The abatements will be generated from the non -TIF portion of the Legacy development. A public hearing has been held and City Council action has been taken to establish this tax abatement district. Our financial advisor, Springsted, Inc. has issued their recommendation for the issuance of $2,710,000 G.O. Tax Abatement Bonds Series 2006A. A portion of this issue will be used to finance interest on the bonds (capitalized interest) in the first 2 -3 years until the abatement district begins to generate taxes. As a result of debt retirements and debt refundings, the city's debt levy is projected to decrease over the next three years. The abatement levy for the Target and Kohl's commitments will also be reduced to zero by 2009. The combination of these will create sufficient levy capacity to pay the capitalized interest through a tax levy. The amount of bonds to be issued may be reduced if the city council is willing to use the levy capacity made available through the referenced reductions to pay the capitalized interest. This possibility can be discussed at the work session prior to the City Council meeting. In addition, the City Council will soon consider approval of public improvement projects for County Road 49 Watermain Improvements (in conjunction with the Anoka County bridge replacement project) and Lois Lane Street and Utility Improvements. To finance the improvements to be made in these projects it is necessary to issue and sell General Obligation Utility Revenue bonds. Springsted, Inc. has issued their recommendation for the issuance of $3,945,000 G.O. Improvement Refunding Bonds Series 2005B. If approved, the sale of these two issues would occur on June 26, 2006, with consideration for award by the City Council at its meeting the same day. The Series 2006A issue would have a 15- year term and would be repaid through the tax abatement district. The Series 2006B issue would would have a 10 -year term and would be repaid through utility and trunk fees. Staff recommendation is for the City Council, in separate actions, to approve Resolution 06 -85 providing for the issuance and sale of $2,710,000 G.O. tax Abatement Bonds, Series 2006A and Resolution 06 -86 providing for the issuance and sale of $570,000 G.O. Utility Revenue Bonds, Series 2006B.