2004-142 Council Resolution - Laserfiche WebLink

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• City of Lino Lakes, Minnesota September 23, 2004 DISCUSSION The Bonds have been structured as a single issue although they have been broken out by project type as follows: (1) the street improvement portion and; (ii) the water improvement portion. Each portion has been structured independently and then combined into this single Bond issue. Combining the street improvement projects with the water improvement projects into a single issue enhances the marketability of the Bonds (larger principal maturities) and reduces issuance costs. Each portion of the Bonds will be repaid from different revenue sources (special assessments and net revenues of the City's water utilities). The City will need to establish a system to track each portion of the Bonds separately. The sources and uses of funds for the Bonds are detailed on page 6 and show the breakdown between the street improvement portion and the water improvement portion. Page 7 shows the total debt service on the Bonds. The Street Improvement Portion The street improvement portion of the Bonds will be used to finance various street improvements associated with the City's Birch /Hodgson project, including construction of turn lanes, realignment of Ware Road, and installation of traffic signals. The street improvement portion will be repaid from special assessments levied against benefited properties. Assessments in the aggregate amount of $600,000 will be filed on or about October 14, 2004 for first collection in 2005. Assessments will be spread over a term of 15 years, with even annual total payments of principal and interest. Interest will be charged on the unpaid principal balance at a rate of 7.0 %. The projected assessment income schedule is shown on page 8. It is expected that assessment income, if collected as scheduled, will be sufficient to pay 100% of the debt service on the street improvement portion of the Bonds. The repayment of the street improvement portion of the Bonds has been structured around the projected assessment income to provide for even annual cash flow surpluses over the repayment term. Each year's first -half collections of assessments will be used to pay the August 1 interest payment in the year of collection. Second -half collection of assessments plus surplus first -half collections will be used to pay the February 1 principal and interest payment in the following year. The principal structure for the street improvement portion of the Bonds is shown on page 9 and shows the following: • Columns 1 through 4 show the annual principal payments, estimated interest rates and projected total principal and interest payments, given the current market environment. ■ Column 5 shows the 5% overlevy which is required by State statutes and serves as a protection to bondholders and the City in the event of delinquencies in the collection of assessments. • Column 6 shows the total projected assessment income developed on page 8. • Column 7 shows the estimated difference between columns 5 and 6 and represents the projected annual surplus of assessment income over 105% of debt service. Based on projected assessment income, it is expected that the City will not be required to levy ad valorem property taxes to pay debt service on the street improvement portion of the Bonds. Page 4