Agenda Packets - 1994/03/28 - Laserfiche WebLink

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S P R I N GSTE D 120 South Sixth Street PUBLIC FINANCE ADVISORS Suite 2507 Minneapolis, MN 55402-1800 (612) 333-9177 Fax: (612) 349-5230 Home Office 85 EastevPlace Suite• 100 16655 West Bluemound Road 100 Saint Paul, MN 55101-2143 Suite 290 (612) 223-3000 Brookfield, WI 53005-5935 Fax: (612) 223-3002 (414) 782-8222 Fax: (414) 782-2904 6800 College Boulevard Suite 600 Overland Park, KS 66211-1533 (913) 345-8062 Fax: (913) 345-1770 March 22, 1994 1800 K Street NW Suite 831 Washington, DC 20006-2200 (202) 466-3344 Fax: (202) 223-1362 Mayor Jerry Linke Members, City Council Ms. Samantha Orduno, Clerk-Administrator Mr. Donald Brager, Finance Director-Treasurer City of Mounds View 2401 Highway 10 Mounds View, MN 55112 Re: Recommendations for the Issuance of: $4,970,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 1994A $725,000 General Obligation Tax Increment Refunding Bonds, Series 1994B We respectfully request your consideration of our recommendations for the issuance of the above mentioned issues as set forth in the attached "Terms of Proposals." Each issue will be discussed separately, with items common to both to follow. $4,970,000 Taxable General Obligation Tax Increment Bonds, Series 1994A The proceeds of this issue will be used to refund the 1997 through 2003 maturities of the City's $6,000,000 Taxable General Obligation Tax Increment Bonds, Series 1988A (the "1988A Bonds") to effect interest cost savings. These bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and 469. Proceeds of the 1988A Bonds were originally used to finance nonessential costs associated with development of the Mounds View Business Park. Refunding of the 1988A Bonds The net interest rate on the callable maturities of the 1988A Bonds, those maturing in 1997 through 2003 is 9.69%. Based on current market conditions it is estimated the 1988A Bonds could be refunded as a "crossover" refunding at a net interest rate of approximately 6.50% with a total dollar savings of $426,570. The 1988A Bonds will be called for prepayment at a price of par on February 1, 1996. In a crossover refunding, the proceeds of the refunding (new issue) bonds are placed in an escrow account with a major bank and invested in government securities. These securities and their earnings are structured to pay debt service on the new bonds through the call date of the 1988A.Bonds (February 1, 1996), at which time the escrow account will cross over and pay the remaining principal on the 1988A Bonds by calling in all of those remaining bonds. The