07/09/1990 Council Minutes - Laserfiche WebLink

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COUNCIL WORK SESSION JULY 9, 1990 Refinancing of 1987 GO Bonds Mayor Bisel called the work session to order at 5:30 P.M. Council Members present: Neal, Reinert, Bohjanen. Council Member Kuether arrived at 5:45 P.M. City Engineer's, Dan Boxrud and Darrell Schneider; Public Works Director, Don Volk; Planner, John Miller; Fiscal Consultant, David MacGillivrary; Administrative Assistant, Dan Tesch and Clerk Treasurer Marilyn Anderson were also present. The purpose of the work session was to discuss the refinancing of the 1987 General Obligation Temporary Bonds. Mr. MacGillivrary explained that he is continuing with the request of the Economic Development Authority to purchase a $1,115,000.00 bond for land acquisition and construction of a new fire station. He also noted that the City should not approve more than $5,000,000.00 bonds per year because of U. S. Treasury regulations. Mr. MacGillivrary distributed a work sheet outlining the original 1987 Temporary GO Bond noting that on September 1, 1990 the City is responsible to pay the sum of $1,693,500.00. He noted that there is enough cash on hand in this bond fund to reduce the principal amount to $775,000.00. The balance will be refinance by another bond. Mr. MacGillivrary also listed the possible sources of funding for the balance due for the 1987 Temporary GO Bonds. He was concerned because a large portion of the balance ($612,484.00) will have to be paid from future connections. Mr. MacGillivrary gave a brief background on the 1987 bonds and explained the question now is whether the remaining balance of these bonds should be refinanced with another temporary issue or with a long term bond. He noted the difficulty of trying to assess property owners because of the Charter provisions. The original 1987 Bond assumed that - there would already be a substantial number of connections. These connections have not materialized. Mr. Reinert asked how many connections would be needed to finance the $612,484.00 deficit. Mr. Schneider said approximately 400 connections. Mr. MacGillivrary recommended that the Council proceed with issuing another temporary bond to refinance the balance of the 1987 GO Temporary Bond. This would allow the Council time to get a handle on what is yet to be connected so that the capacity in the trunk line can be utilized. Mayor Bisel asked if the City was prudent in issuing a three (3) year temporary bond in 1987. Mr. MacGillivrary said yes. He noted the options would be limited if the City had bonded long term. There was discussion regarding the subdivisions that were included in the estimate of connections for the 1987 Bond. It was noted that the subdivisions are about 75% completed, not 100% as anticipated. PAGE 1