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Lease Revenue Bonds <br />• EDA to issue bonds which are repaid from annual <br />lease payments from the City under a facilities <br />lease agreement. City builds the facility <br />• City may levy for the lease payment which <br />approximates debt service. Govt. to Govt. lease – <br />outside of levy limits <br />• City owns land and which is leased to the EDA <br />• Upon completion of bond repayment, land and <br />building leases expire and City owns both <br />S prin aetej <br />Lease Revenue Bond Specifics <br />$4,800,000 to $5,200,000 (reserve) <br />• Total Project Costs $4,624,118 <br />• Reserve of 100% of maximum debt service or <br />about $360,000 added to issue size <br />• Capitalized interest $96,000 plus Issuance Costs <br />• 20 year term <br />• Estimated interest rate of 3.3% <br />• Pledge to annually appropriate for lease payments <br />from the City to the EDA <br />S prin r ted <br />Lease Revenue Bond <br />Competitive versus Negotiated Sale <br />• Avoid bid options for purchasers of Lino Lakes bonds on the <br />same day—one being a GO backed bond <br />• Annual appropriation competitive bonds would likely suffer <br />• Select a non -meeting date with lower supply of bonds <br />• Tell the story of the bond and reconsider reserve levels and <br />tighten contingency bids <br />• Springsted to help negotiate terms aligned to the market that <br />day using comparatives and market indexes <br />• More control over a non -GO offering <br />5 <br />