09/27/1971 Council Minutes - Laserfiche WebLink

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90 9/27/71 Mr. L'Allier called the hearing on the bonding for the Chomonix projects to order at 9:08 P.M. Mr. Osmon Springsted passed out copies of the bonding book- let for the proposed issue. He explained the amount of the issue as follows: 'Construction costs (per Milner W. Carley & Associated) $482,350.00 Capitalized Interest 56,950.00 Discount 10,700.00 Total $550,000.00 Mr. Springsted suggested that 2 year's interest be built in since there will be no assessments for the improvements until 1972 with the first collection sched- uled for 1973; he felt that at least 1 year's interest was necessary to avoid a tax levy and the second year's interest as a cushion if the assessments are less than the interest due in 1973, or not collected before the interest comes due. If the funds provided by the 2 year's interest are unnecessary, they can be added to the construction fund or somewhere else. Nothing will be lost by adding this amount. Only the capitalized interest which proves to be necessary will be charged against the project. Excess money can be invested at nearly the same rate as the interest on the bonds. Mr. Springsted noted that the $10,700 discount bidding is actually part of the interest cost; without this, the rate would be higher. Mr. Springsted noted that since the rate of the development is unknown, to buy time and gain experience he suggests that Lino Lakes issue 3 year temporary bonds. These would be callable in two years, coming due in 3 years, and the balance could be refinanced with definitive bonds or again with temporary bonds. The principal payment would be due at their maturity on Nov. 1, 1974. Making the bonds callable one year in advance of that date gives the Village the op- tion to refinance the bonds a year earlier if financial conditions warrant it. Mr. Springsted proposed that the sale of the bonds be held on Wednesday, October 27, 1971, at 8 o'clock P.M. The funds would be available about the middle of November. Mr. Gotwald had stated that he doubted we would have to pay the con- tractor before that time. Mr. Springsted assumed that the Village would like to use the Howard firm again for the approving legal opinion. Mr. L'Allier asked for questions- -there were none. Mr. L'Allier noted that at the joint meeting held with Springsted and Jandric people, it was agreed that Jandric would deposit the amount of payments due each year in a bank fund in the name of the Village, and these would be held until released by the Village. Mr. L'Allier inquired whether, if the bids were awarded today, whether we could require Jandric to deposit the $50,000 for the interest before we sold the bonds and could we request a letter from the bank stating that such funds were on deposit in the Village's name. Mr. Locher said yes, that it would be a prior lien. Mr. Springsted stated that he was asked for suggestions on how to handle the Metro Sewer Board charges for 1972. The statement of cost allocation shows the Lino Lakes 1972 charges to amount to $50,281.68, which is not the total amount, but left after a deferment of balance. The question is how will the $50,000 be paid. A large portion of the charge is for reserve capacity in the interceptor whether or not this project proceeds. Perhaps an adjustment would be made if the project is not hooked up in 1972. Mr. Springsted stressed that not all of the $50,000 is attributable to this project. If the entire assessment of $50,281.68 were to be enevly divided over