04-27-2015 Council Packet - Laserfiche WebLink

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SECURITY AND FINANCING Street Reconstruction Portion The Street Reconstruction Portion of the Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. The City will make its first levy for the Street Reconstruction Portion of the Bonds in 2015 for collection in 2016. Capitalized interest has been included in the par amount of the Street Reconstruction Portion of the Bonds to make the interest payment due on the Street Reconstruction Portion of the Bonds on February 1, 2016. Thereafter, each year's collection of taxes, if collected in full, will be sufficient to pay 105% of the interest payment due August 1 of the collection year and the principal and interest payment due February 1 of the following year for the Street Reconstruction Portion of the Bonds. Abatement Portion The Abatement Portion of the Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge tax abatement revenues derived from certain abated parcels within the City for repayment of the Abatement Portion of the Bonds. Capitalized interest has been included in the par amount of the Abatement Portion of the Bonds to make the interest payment due on the Abatement Portion of the Bonds on February 1, 2016. Thereafter, each year's collection of abatement revenues will be sufficient to pay 105% of the interest payment due August 1 of the collection year and the principal and interest payment due February 1 of the following year for the Abatement Portion of the Bonds. The City does not anticipate the need to levy taxes for repayment of the Abatement Portion of the Bonds. The annual maximum amount of abatement by the City cannot exceed the greater of (i) 10% of the City's adjusted taxable net tax capacity ($1,776,619, based on the City's 2013/14 adjusted taxable net tax capacity of $17,766,193), or (ii) $200,000. The maximum annual abatement for the City's outstanding tax abatement bonds, including an estimate for the Abatement Portion of the Bonds, is $635,440, which is within the statutory limit. FUTURE FINANCING The City does not anticipate issuing any additional long-term general obligation debt within the next 90 days. The Lino Lakes Economic DevelopmentAuthority will issue Lease Revenue Bonds to finance a new Fire Hall for the City and the City will agree to pay the debt service on those bonds as the lessee of the facility. The City's obligation to pay debt service on such bonds is subject to non -appropriation on an annual basis. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. -5-