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MEMORANDUM <br />DATE: June 1, 2010 <br />TO: City Council <br />FROM: Mike Morrison, City Manager <br />Roger Larson, Finance Director <br />ITEM: CERTIFICATE OF INDEBTEDNESS <br />The attached reference sheet represents facts and figures for financing the purchase of <br />capital equipment. Under State Statue #475.61, the City Council may issue debt (borrow <br />money) to purchase: <br />1) Public safety vehicles and equipment. <br />2) Road construction and maintenance equipment. <br />3) Computer hardware and software. <br />The term of the Certificate cannot exceed 10 years. The funds can be used to purchase <br />new or used equipment, however the expected life must be equal to or greater than the <br />life of the Certificate. Example — The purchase of computer hardware and software with <br />an expected life of 7 years, the City could issue a 5 -year Certificate, but not a 10 -year. <br />For Council consideration and review, Staff has included examples of a 5 -year Certificate <br />of $400,000 (Fire truck only) and a 5 -year Certificate for $550,000 (Fire truck and single <br />axel plow truck for Public Works). <br />A review of the impact of the proposed Certificate's on a property valued at $238,000 <br />(the median value for St. Anthony) is as follows: <br />Fire Truck: $400,000 <br />Fire Truck & Plow: $550,000 <br />Property Owner Pays <br />Levy <br />$ 30.96 First Year <br />$ <br />96,320 <br />$ 29.62 Second Year <br />$ <br />92,132 <br />$ 30.83 Third Year <br />$ <br />95,912 <br />$ 30.23 —Fourth Year <br />$ <br />94,038 <br />31.23 —Fifth Year <br />$ <br />97.146 <br />$152.87 <br />$475,548 <br />Property Owner <br />$ 41.89 First Year <br />$ 40.66 Second Year <br />$ 41.70 Third Year <br />$ 40.88 —Fourth Year <br />$ 41.64 —Fifth Year <br />$206.77 <br />Levy <br />$130,300 <br />126,483 <br />$129,712 <br />$127,176 <br />$129.528 <br />$643,199 <br />