08/24/1981 Council Minutes - Laserfiche WebLink

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54 August 24, 1981 August 13th minutes - there were no corrections or additions. Mayor Gourley said hearing none - the minutes would stand approved as presented. On considering the Disbursements - Mrs. Elsenpeter asked how much longer Mr. Zerwas would be enrolled in the Circle Pines Insurance Plan? Mr. Schumacher said this employee would be transferred to this City's plas as of September 1, 1981. There wer no further questions - Mayor Gourley said the Disbursements would stand approved as presented. MR. STEVE MATTSON - JURAN 8 MOODY Mr. Mattson said he had consulted with OSM about the proposed sewer pro- ject and had prepared a sheet on the proposed temporary bond issue. The best estimates for the construction costs is $1,500,000.00 - tb`_this is added the estimated costs for Engineering, Aministration, contingencies, Bond Consel, capitalize the interest for 18 months - this amount to $280,000.00, and the 2%discount factor is $41,000.00 making a total bond amount of $2,150,000.00 Mr. Mattson noted that the capitalized interest rate is at 10%. Mr. Mattson said the City has two options; 1) try and sell bonds over a 20 year period. Mr. Mattson said that in his ipinion that 20 year bond issue has only a 50/50 chance of selling at this time; 2) a bond issue for a shorter period of time. Mr. Mattson is proposing tonight that the City sell bonds under Chapters 429 and 475 which authorizes the City of issue a three year temporary bond to mature on October 1, 1984. The call notice is April 1, 1982 at pare. This gives the City the maximum flexiability in case interest rates do turn around and the market be- comes favorable and it becomes possible to sell 20 year bonds. Mr. Mattson felt the short term bonds is the best option of the City. If for some reason interest rates stay high and at the end of three years long term bonds have not been issued, the statute allows the City to re- issue three year bonds and a one year trunover is allowed after that. Mr. Mattson proposed that these bonds be dated October 1, 1981 and mature October 1, 1984. The first interest payment would be due April 1, 1982 and would be the first call date on the bonds. The bonds would be issued in $5,000.00 blocks and purchase price minimum bid would be $2,108,075.00. That difference is the discount factor which is the profit for the under- writers. The Good faith check that would accompany each of the bids would be in the amount of $43,000.00. Mr. Mattson is proposing that the bonds be sold on September 17, 1981 which is a Thursday. This is not a scheduled meeting for the Council but this is the first date the bids can be pre- sented to-the Council. This meeting would be at 7:30 P.M. at the Lino Lakes City Hall. Proper action of the Council at this time would be the passage ofthe Resolution authorizing this action that Mr. Schumacher has. This Resolution was drafted by Mr. David Kennedy, Bond Counsel. Mayor Gourley asked what happened on September 17, 1981 and Mr. Mattson said they would present the bids to the Council and hopefully award a bid at that time. It would take 30 days to get the bonds printed and get the legal transcript in proper form and then take delivery of the money. He felt the money would be available the middle of October.