#13 - 2025 Bond Issuance - Laserfiche WebLink

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Northland Securities, Inc. Page 3 Issue Overview Purpose Proceeds from the Bonds will be used to finance the City’s 2025 street projects and to pay costs associated with issuing the Bonds. The Bonds have been sized based on estimates provided by the City. The table below contains the sources and uses of funds for the bond issue. Authority The Bonds will be issued pursuant to the authority of Minnesota Statutes, Chapters 429 and 475. Under Chapter 429, an Improvement means any type of improvement made under authority granted by section 429.021, which includes, but is not limited to, improvements to streets and sidewalks, storm and sanitary sewer systems, and street lighting systems. Before issuing bonds under Chapter 429, the City must hold a public hearing on the Improvements and the proposed bonds and must then pass a resolution ordering the improvements by at least a 4/5 majority. Public hearings have been held for the Improvement Portion and all corresponding resolutions have passed with at least a 4/5 majority. Structure The Bonds have been structured over 10 years, with relatively level annual debt service payments beginning on February 1, 2027. The proposed structure for the bond issue and preliminary debt service projections are illustrated in Attachment 1 and the estimated levy schedule is illustrated in Attachment 2. Security and Source of Repayment The Bonds will be general obligations of the City. The finance plan relies on the following assumptions for the revenues used to pay debt service, as provided by City staff: • Special Assessments. The City is expected to levy special assessments against benefited properties in the amount of $630,000. The assessments will be payable over 15 years, with an interest rate of 1.00% over the average coupon of the Bonds (currently estimated to be 5.00%) and structured for level annual payments of principal and interest. Because the special assessments are structured over 15 years, revenues will continue to be received beyond the life of the Bonds. The plan assumes that the assessments will be levied in 2025 for initial payment in 2026. • Property Taxes. The remaining revenues needed to pay debt service on the Bonds are expected to come from property tax levies. The initial projections show an annual tax levy averaging approximately $226,000 is needed to produce the statutory requirement of 105% of debt service after accounting for assessments and utility revenues. The levy may be adjusted annually based on actual special assessment collections and additional Sources Of Funds Par Amount of Bonds $2,185,000.00 Total Sources $2,185,000.00 Uses Of Funds Deposit to Project Construction Fund 2,100,000.00 Costs of Issuance 57,113.50 Total Underwriter's Discount (1.250%)27,312.50 Rounding Amount 574.00 Total Uses $2,185,000.00