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OTo: <br />Mike Momson — City Manager <br />EHLERS15 <br />From: Stacie Kvilvang & Jonathan North — Ehlers and Associates <br />LEADERS <br />IN PUBLIC FINANCE <br />5 <br />Subject: 2010 Road Reconstruction Bonds <br />OTo: <br />Mike Momson — City Manager <br />C <br />From: Stacie Kvilvang & Jonathan North — Ehlers and Associates <br />W <br />Date: March 23, 2010 <br />5 <br />Subject: 2010 Road Reconstruction Bonds <br />Overview <br />On February 23, 2010, the City Council set a public hearing on the approval of a 5 -Year Street <br />Reconstruction Plan (SRP) and the sale of Street Reconstruction Bonds to finance <br />improvements for the 2010 road reconstruction improvements along Silver Lane, <br />Primary Issues to Consider <br />1. Is the City assessing benefiting property owners for the project? <br />2. What is the proposed financing mechanism for the remaining project costs? <br />3. How does this type of financing differ from the City's typical way of financing street <br />reconstruction projects? <br />4. What is the timeline/process for the issuance of the bonds? <br />Analysis of Issues: <br />1. Is the City assessing benefiting property owners for the project? <br />Yes. The total project costs are approximately $1.3 million. The City will be assessing <br />approximately $110,000 to benefiting property owners at a rate of 1.5% above True <br />Interest Costs (TIC) of the bonds (standard practice). Since the amount being assesses is <br />not at least 20% of the project costs, the City will be financing the improvements through <br />street reconstruction bonds instead of the typical 429 assessment bonds. <br />2. What is the proposed financing mechanism for the remaining project costs? <br />We are proposing that the City utilize its authority to issue General Obligation Street <br />Reconstruction Bonds to finance the entire remaining balance of the project not being paid <br />by assessments will be paid by a general tax levy (same as when the City issues 429 <br />assessment bonds). This authority was granted to Cities in 2002 and it generally exempts <br />LEADERS IN PUBLIC FINANCE <br />I <br />3o6o Centre Pointe Drive Phone: 65i -697-85o6 Fax: 65i-697-8555 <br />Roseville, MN 55x23-iio5 skvilvang@ehlers-inc.com <br />