07/24/2006 Council Packet - Laserfiche WebLink

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THE SERIES 2006D BONDS Authority and Purpose The Series 2006D Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475. Proceeds of the Series 2006D Bonds will be used to finance improvements to the City's water and sewer utilities related to the following projects: (i) the County Road 49 watermain project (the "County Road 49 Project ") and (ii) the Lois Lane watermain project (the "Lois Lane Project "). The composition of the Series 2006D Bonds is as follows: County Road Lois Lane Issue 49 Project Project Summary Project Costs $224,742 $320,378 $545,120 Costs of Issuance 6,968 9,932 16,900 Allowance for Discount Bidding 3,290 4,690 7,980 Total Series 2006D Bonds $235,000 $335,000 $570,000 Security and Financing The Series 2006D Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge net revenues of its water and sewer utilities. Pursuant to Minnesota Statutes, Chapter 444 and the resolution awarding the sale of the Series 2006D Bonds, the City will covenant to maintain water and sewer rates sufficient to support the operation of the water and sewer utilities and to pay debt service. The City is required to annually review its budget for the utilities to determine whether current rates and charges are sufficient and to adjust such rates and charges as necessary. Net revenues of the City's water and sewer utilities, if collected in full, are expected to be sufficient to pay 105% of the February 1 principal and interest payment and the August 1 interest payment due in the year of collection. The City does not expect to levy taxes for repayment of the Series 2006D Bonds. FUTURE FINANCING The City expects to issue refunding bonds to achieve interest savings in the fall of 2006. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations.