02-22-2016 Council Packet - Laserfiche WebLink

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leEHLERS LEADERS IN PUBLIC FINANCE receives the individual pledges of each of the members of the Commission. In essence, Circle Pines is asking each of the member cities to issue their own capital notes that will be held by Circle Pines in order to reduce its risk. Proceeds of the bond issue would be used by the Circle Pines to pay for the costs of the equipment and financing. To offset the levy requirement for each of the member cities, the Commission would agree to budget annually to provide fee revenues to repay the debt. Each member city's capital notes and G.O. pledge would support a principal amount and annual payment of the debt allocated using the most recent system revenue shares of the Commission (2015). Each member city's capital notes would be issued to Circle Pines and certified with its county for tax levy purposes, however Circle Pines would serve as the sole issuer and obligated party for the debt's reporting and administrative purposes. Using the most recent valuations, each member city's share is well below the 0.25% of market value threshold for purposes of publishing a public notice of the debt. However, the total principal amount would exceed the Circle Pines' 0.25% threshold and would require it to publish notice of its resolution determining to issue the debt. The Bonds cannot be issued until after a ten day period after the publication to allow for a petition asking to put the matter to referendum. Any such petition must be signed by voters equal to 10% of the vote cast at the last municipal election. The Commission has already included funding within its capital budget for 2016 to provide funds to make the first year's debt payments. From a risk standpoint, the projected annual debt payments equates to 19.5% of the overall fee revenues collected in 2015. Even with the payments factored into the 2016 budget, the Commission plans to remit $320,000, or 1.4 times the expected annual debt payment, in franchise fees back to the members after all capital and operating costs. Using the most recent member share information, the table below shows each members share of the estimated debt principal and annual payments. Members System Revenue Share (2015) = Share of2016 Debt Estimated Share of Annual Debt Payments* Blaine 53.857981% $ 1,112,167 $ 120,987.27 Centerville 3.338439% $ 68,939 $ 7,499.51 Circle Pines 4.787906% $ 98,870 $ 10,755.61 Ham Lake 13.958125% $ 288,235 $ 31,355.71 Lexington 1.796855% $ 37,105 $ 4,036.48 Lino Lakes 16.502266% $ 340,772 $ 37,070.90 Spring Lake Park 5.758428% $ 118,912 $ 12,935.81 Totals: $ 2,065,000.00 $ *$2,065,000 G.O. Equipment Certificates at 1.91% w/ 10 yr term 224,641.29 1 800-552-1171 1 www.eblers-inc.carn