Agenda Packets - 1991/03/04 - Laserfiche WebLink

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f dr SPRINGSTED 4C-97 PUBLIC FINANCE ADVISORS • 500 Elm Grove Road 85 East Seventh Place 135 North Pennsylvania Street Suite 101,P.O.Box 37 Suite 100 Suite 2015 Elm Grove,WI 53122-0037 Saint Paul,MN 55101-2143 Indianapolis,IN 46204-2498 (414) 782-8222 (612)223-3000 (317)684-6000 Fax:(414)782-2904 Fax:(612)223-3002 Fax:(317)684-6004 2739 Second Avenue S.E. 6800 College Boulevard 222 South Ninth Street Cedar Rapids,IA 52403-1434 Suite 600 Suite 2825 Fax:1(913)363-6999-221Overland Park,KS 66211-1533 Minne2 apolis,MN 55402-3368 77 Fax:(913)45-017 70 Fax:(612)33333-3-2363 1,,c�2627?8?4. ,9 ./ February 25, 1991 tt-�' �y� '� w CAI ;O . (.11 Ce- 15VrIvS \k/ Mayor Jerry Linke o-2/e, r, � Member, City Council %nit,/E` ; ;�,v.;- Ms. Samantha Orduno, Clerk/Administrator Mr. Donald Braeger, Finance Director Mr. Ric Minetor, City Engineer/Director of Public Works Mounds View City Hall 2401 Highway 10 Mounds View, MN 55112 11 Re: General Obligation Water Revenue Bonds, Series 1991 We have reviewed the City's water enterprise capital needs, its projected revenues and the ability to finance the projects with those revenues. This letter summarizes our analysis providing some options that the City may wish to consider. Appendix I is a summary provided us by Mr. Minetor outlining the capital needs of the City for the next year. These project costs also include engineering expenses. Projects relating to well No. 4 and to water tower No. 2 are considered optional projects which may be dropped and for this reason we have provided a second option of bonding needs. To the listing provided-us we have added the estimated costs of bond issuance and underwriter's discount, adjusting the numbers for potential investment earnings, resulting in bond issue sizes of $2,875,000 if all of the work were to be done and $2,225,000 if the optional projects were not included. • Appendix II is a summary of the revenues available from the water utility to finance the projects. These numbers are extracted from the Voto, Toutges, Redpath & Co., Ltd. report dated December 20, 1990. This report included projected rate increases for the next four years. Appendix Ill is a debt service amortization schedule for the Option 1 ($2,875,000) bonding. This assumes the bonds will be sold this spring using current market rates. We have hedged the rates slightly higher than bids received during the week of February 18 because there is the likelihood of a slightly upward trend in interest rates as the full construction season begins and the supply of tax-exempt bonds being offered continues to increase. The length of this program was designed to provide a buffer of approximately 10% of surplus revenues over debt service. Minnesota Statutes requires that the City provide at least 5% for a cushion, however • the City will have other capital needs which it may want to provide for from available cash rather than additional borrowing. Also, these revenues are projections which may change as the years go on. Please notice that the available income projection does not go beyond the estimates of the 1994 net revenues at which point we have frozen the numbers.