02/04/2008 Council Packet - Laserfiche WebLink

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• • • Sprin seed January 29, 2008 Mr. Gordon Heitke, City Administrator City of Lino Lakes 600 Town Center Parkway Lino Lakes, MN 55014 -1182 RE: Responses to City Ordinance Amending City Charter Mr. Heitke: 4H--/-q c e 3 Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.springsted.com We have reviewed, the Lino Lakes City Charter substitute amendment as proposed by the Lino Lakes Charter Commission as well as the draft Review Letter prepared by Steve Bubul, Kennedy & Graven, City's bond counsel. There are many terms and definitions throughout the proposed Charter that allow for multiple interpretations or are contradictory. Mr. Bubul has thoroughly addressed these points in his letter. As requested, we have focused on the financial impact on the City with regard to bonds and the City's credit rating. The City's bond credit rating, assigned by Moody's Investor Service, is currently an Aa3, which is the second highest category grouping possible. This bond rating is based on several criteria including: tax base size, infrastructure management, capital financing strategies, debt management, fund balances, long -term strategic planning, economic development and growth, financial management, leadership and overall city management. Credit ratings group and compare cities to each other so losing or gaining in areas may move a city up or down in these ratings. The higher the credit rating, the lower the city's interest rate on bonds, resulting in lower interest costs. A credit rating is also a measure of how well a city is managed... Rather than a section -by- section review of the proposed Charter, there are five areas we address: • Quality of Roads and Streets • Reverse Referendum • Taxability of Bonds for Special Exceptions • Marketability of Bonds • Administrative Efficiency and Flexibility Quality of Roads and Streets Minnesota cities primarily use two bonding methods to finance roads • Special Assessment Bonds. Such bonds do not require a referendum under state law. A city council may vote to use special assessment bonds if at least 20% of the debt service or the total project costs are paid for with special assessments. • Street Reconstruction Bonds. Such bonds allow the 20% minimum assessment criteria to be waived for reconstruction projects if a city approves a five -year road plan following a public hearing and adopts the plan which identifies reconstruction bonds to be used. Both the plan and bonding amounts must be approved unanimously by a vote of the entire city council. Street reconstruction bonds are subject to reverse referendum. Public Sector Advisors