CC PACKET 03142006 - Laserfiche WebLink

Home Browse Search

Mike Mornson Sale of Commercial TIF Revenue Bonds for Silver Lake Village March 6, 2006 Page 2 • when will the bonds be issued? It is anticipated that the bonds will be issued by April 15th and that the funds will be available by April 3 0th. In addition, since the authorizing resolution includes -a not to exceed amount the Executive Director of the HRA is given the authority to approve or reject the sale results within these parameters. Either way, Ehlers will provide a memorandum to the City/HRA outlining the results of the sale. * Is there any risk to the City/HRA in issuing these bonds? Issuance of tax exempt TIF revenue bonds is a low risk proposition for the City/HRA since the development is constructed and. paying -taxes and the bonds are backed solely by TIF revenue generated from the project. If revenues are not sufficient to pay principal and interest on the bonds, the City is not required to levy taxes to make up the shortfall. It should be noted that these tax exempt bonds are "counted" against the City's Bank Qualification (B Q -- annual cap of $10 million for tax exempt debt). However, it is anticipated that with the $2 million in G4 Bonds issued by the City for the 2006 Road Reconstruction Program combined with this $5.4 million issue, the City still has the capacity to issue an additional $2.6 million in B bonds, if it deems it is necessary for other City projeets. What will the net proceeds be after paying off obligations? If we assume that we issue $5.4 million in TIF revenue bonds, the City/Authority could net approximately $5.1 million to the TIF fund (after deducting costs of issuance). 7f we subtract the $2.9 million obligation to repay the commercial lender, then the City/HRA would net approximately $2.1 million to the TIF District fund. • What will the net proceeds be utilized for? These proceeds can be utilized for qualified TIF expenditures within TIF District 3-5 or to be utilized/pooled to projects outside of the TIF district, but located in the City's Project Area. Currently, it is anticipated that the majority of the funds, approximately $1.8 million, will be utilized to pay for the 3 9t` Avenue lift station that is needed before phase II of the redevelopment can be undertaken. The remaining funds will be available for other projects determined by the City/HRA. Please contact me at 651-697-8506 with any questions. cc: Jerry Gilligan -- Dorsey & Whitney File 116