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LAKE ELMO CITY COUNCIL MINUTES August 06, 2013 Page 6 of 8 ITEM 14: PRESENTATION OF FINANCING PLAN OF G.O. BONDS, SERIES 2013A; APPROVAL OF THE ISSUANCE OF G.O. BONDS, SERIES 2013A; RES. Finance Director Bendel introduced Paul Donna from Northland Securities. He explained the bonding process. In order to fund various infrastructure projects in 2013 (Keats MSA Street and Trunk Watermain Improvements, Production Well #4 and connecting Watermain, Lake Elmo Avenue Sewer Infrastructure Improvements and the Section 34 Water and Sewer Utility Extension), G.O. Bond funding will be necessary. There is currently a large demand for municipal bonds. Property tax revenue will not be used to pay debt, however, the City will still able to use taxes if the revenue is short. Hoping to price bonds in mid-September. Council Member Nelson asked about the prepayment option. There is no penalty during the allowed time. Council Member Reeves also asked about the accrued interest and if it was due at the prepayment. It will be due at the call date. Depending on when the prepayment takes place, there may be some accrued interest. MOTION: Council Member Smith moved TO RESOLUTION NO. 2013-063, AUTHORIZING THE ISSUANCE OF G.O. BONDS, SERIES 2013A IN THE AMOUNT OF $5,725,000. Council Member Reeves seconded the motion. MOTION PASSED 5-0. ITEM 15: OLSON LAKE TRAIL SANITARY SEWER EXTENSION – DISCUSSION AND CONSIDERATION OF PROJECT ALTERNATIVES Mayor Pearson asked if postponing this item was an option. City Engineer Griffin said that because of the hearing requirements it would have to be postponed to September 3. Mr. Griffin explained the options and gave a recap of the project. It is a joint project with the City of Oakdale. Lake Elmo took lead at the feasibility stage. Oakdale did the design, and bids came in higher than expected. The question now is how to proceed with high bids. Mr. Griffin explained the four options presented and the pros and cons of each. It was explained that the bids were high because of how small the project was. The first phase only involves seven properties. The four options are: 1. Award the Contract to the lowest responsible bidder and absorb additional costs funded through the Sewer Enterprise Fund. 2. Rebid the project as an “add alternate” to the Section 34 Water and Sewer Project. 3. Reject all bids and wait to complete Phase 1 and Phase 2 together when the County resurfaces Olson Lake Trail (in 2015 or 2016). 4. Rehear the project and consider raising the assessment amount levied against the benefitting property owners to cover the additional construction costs. One issue is asking contractors to hold bids past the 30/60 days. The deadline is 8/13. Mr. Griffin explained the timing with Lake Elmo and Oakdale Council decisions. Mr. Pearson asked about the risk of not deciding. It was explained that the risk is that the project could unravel. Mr. Pearson stated he is in favor of rehearing (option #4). Council Member Smith clarified the risks with the re-hearing option. She does not think that the City should risk another hearing and having the project unravel. Council Member Bloyer clarified the dates again and confirmed that the contractor will hold the bid. City Administrator Zuleger noted that Oakdale will be going ahead with the project regardless for their two properties. They are planning on paying the difference. Their mature sewer system helps pay for it. Mr. Zuleger also noted that the new price of $25,000 is about the cost of a new septic