CC PACKET 03102009 - Laserfiche WebLink

Home Browse Search

Funding Source(s): The Bonds are general obligations of the City and as such are secured by a pledge of the City's full faith, credit and taxing powers, The Bonds will be paid from revenues as follows: GO Improvement Portion of the Bonds. Under Minnesota Statutes, Chapter 429, principal and interest on the Bonds is payable from special assessments against benefiting property owners and a tax levy. The special assessments amount is $531,000 and will be levied in the years 2009 through 2023 for collection in 2010 through 2024. The remaining balance will be paid from a tax levy. The required 105% coverage on the Bonds shows a need for the City to levy approximately $196,000 annually for this project GO Abatement Portion of the Bonds. These Bonds will be paid from a special tax levy which was based upon abating 100% of the City's portion of taxes from specific parcels that surround Emerald Park. The required 105% coverage on the Bonds shows a need for the City to levy approximately $50,000 in 2009 and 2010 and approximately $130,000 in 2011through 2027. GO Refunding Portion of the Bonds. These Bonds will be paid from the same source of payment originally pledged to them (sewer revenues for the 2000A and State Aid funds for the 2000B). Discussion Issues: GO Improvement Portion of Bonds. The repayment schedule has been structured around projected revenues during the term of the financing in order to maintain level debt service payments averaging approximately $250,000 per year through the year 2025. The first interest payment on the Bonds will be February 1, 2010 and semiannually thereafter on February 1 and August 1. GO Abatement Portion of Bonds. Part of the Council's direction was to assure that paying for these improvements would not have a financial impact on City residents. This is accomplished by utilizing the levy capacity that has been "freed up" by the City from paying off two (2) bond issues in 2008 ($50,000) and future levy capacity that will be available in 2011 from decertification of the Chandler TIF District ($87,000). We structured the repayment schedules based upon having $50,000 available for debt service in 2010 and 2011 and $130,000 available in 2012 and beyond (lower than the $137,000 available). The first interest payment on the Bonds will be February 1, 2010 and semiannually thereafter on February 1 and August 1. GO Refunding Portion of the Bonds. Based on current coupon rates, the estimated future savings as a result of this current refunding of the Bonds is as follows: 2000A GO Sewer Revenue Bonds - $53,000 or 6.2% Net Present Value after all fees and expenses (annual savings of approximately $10,000). 2000B GO State Aid Street Bonds - $23,500 or 5.87% Net Present Value after all fees and expenses (annual savings of approximately $4,000). The projected interest rates are based on current market rates. Rates higher or lower will change the actual savings. GFOA recommends issuers have at least a 3% Net Present Value Savings.