Laserfiche WebLink
Mike Mornson <br />Sale of Commercial TIF Revenue Bonds for Silver Lake Village <br />g <br />March 6, 2006 <br />Page 2 <br />When will the bonds be issued? <br />It is anticipated that the bonds will be issued by April 15" and that the funds will be available <br />by April 30th. In addition, since the authorizingresolution includes a not to exceed amount <br />, <br />the Executive Director of the HRA is given the authority to approve or reject the sale results <br />within these parameters.' Either way, Ehlers will provide a memorandum to the City/HRA <br />Y <br />outlining the results of the sale. <br />• Is there any risk to the City/HRA in issuing these bonds? <br />Issuance of tax exempt TIF revenue bonds is a low risk proposition for the City/HRA since the <br />development is constructed and paying taxes and the bonds are backed soler by TIF revenue <br />generated from the project. If revenues are not sufficient to pay principal and interest on the <br />bonds, the City is not required to levy taxes to make up the shortfall. <br />It should be noted that these tax exempt bonds are "counted" against the City's Bank <br />Qualification (B Q - annual cap of $10 million for tax exempt debt). However, it is antic* ated <br />p <br />that with the $2 million in GO Bonds issued by the City for the 2006 Road Reconstruction <br />Program combined with this $5.4 million issue, the City still has the capacity to issue an <br />additional $2.6 million in BQ bonds, if it deems it is necessary for other City'projects. <br />What will the net proceeds be after paying off obligations? <br />If we assume that we issue $5.4 million in TIF revenue bonds, the City/Authority could net <br />approximately $5.1 million to the TIF fund (after deducting costs of issuance). If we subtract <br />the $2.9 million obligation to repay the commercial lender, then the City/HRA would net <br />approximately $2.1 million to the TIF District fund. <br />What will the net proceeds be utilized for? <br />These proceeds can be utilized for qualified TIF expenditures within TIF District 3-5 or to be <br />utilized/pooled to projects outside of the TIF district, but located in the City's Project Area. <br />Currently, <br />. tYJ it is anticipated that the majority of the funds, approximately $1.8 million, will be <br />utilized to pay for the 3 9th Avenue lift station that is needed before -phase II of the <br />redevelopment can be undertaken. The remaining funds will be available for other projects. <br />. p J <br />determined by the City/HRA. <br />Please contact me at 651-697-8506 with any questions. <br />cc: Jerry Gilligan -- Dorsey & VIhitney <br />File <br />59 <br />