Agenda Packets - 2002/08/12 - Laserfiche WebLink

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Item No. 6E Type of Business: CA WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Resolution 5812 Declaring Official Intent to Issue Bonds for the County Road H2 Project Date of Report: August 7, 2002 Attached is Resolution 5812 that makes what is known a declaration of intent to sell bonds. IRS regulations require that in order for a city to sell bonds to finance a construction project, it must make a declaration of intent to sell those bonds prior to the start of construction. Much of the resources needed for the County Road H2 project will come from Municipal State Aid for Streets or other current revenues. However, about $150,000 of the cost will be special assessed to the benefited property owners. These will be collected over a period of ten years. It would be appropriate for the City to sell special assessment bonds with a term of ten years to finance these. Springsted, Inc., the City’s financial advisor, has concluded that the cost of issuance for a bond issue of this small size would be high. Springsted and I are recommending that the City not issue bonds at this time and that instead carry the assessments in the City’s Special Projects Fund. However, in a future year, when additional projects have been completed with special assessment funding, there may be a sufficient balance of special assessments to justify a bond issue. The attached resolution making the declaration if intent preserves the City’s ability to include the County Road H2 assessments in a future bond issue without obligating the City to issue bonds. Adoption of this resolution is time sensitive because construction is to start August 13th, and bonds may not be issued for construction costs incurred prior to the date of this resolution. Respectfully Submitted, Charles Hansen