CC PACKET 02222011 - Laserfiche WebLink

Home Browse Search

Debt Issuance Servicers _ET0__ Details of Proposed Debt Proposed Issue: $3,000,000 General Obligation Improvement Bonds, Series 2011A. Purpose: GO Improvement Portion of the Bonds $1,940,000 million. These Bonds are being issued for a 15 -year term to finance the construction of roadways and sewer and water improvements for the 2011 road reconstruction project and are being issued pursuant to Minnesota Statues, Chapter 429 and 475. GO Refunding Portion of the Bond - $1,060,000 million. The 2003A GO Improvement Bonds are a current refunding callable on February 1, 2011. The Bonds were originally issued in the amount of $1,700,000 with remaining rates ranging from 3.50% to 4.20%. The new principal amount will be $1,060,000 with the same term (ending on February 1, 2019). Based on estimated interest rates of .8% to 2.80%, the estimated present value savings as a result of the current refunding will be approximately $55,000, after all fees and expenses. This savings expressed in present value terms is around 5.3% of the refunded principal. The Bonds are being issued pursuant to Minnesota Statues, Chapter 475. Authority: The Bonds are being issued pursuant to Minnesota Statues, Chapter 429 and 475. Because the City assessing at least 20% of the project costs, the Bonds can be a general obligation without a referendum and will not count against the City's debt limit. Funding Source(s): 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 $388,756 and will be levied in the years 2011 through 2025 for collection in 2012 through 2026. 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 $137,000 annually for this project. The tax impact for this portion of the Bonds is found in the attached document. GO Refunding .Portion of the Bonds. These Bonds will be paid from the same source of payment originally pledged to thetas (special assessments and tax levy). Risk Factors: We have not assumed any pre -paid special assessments. If the City receives a significant amount of pre -paid assessments, it may need to increase the levy portion of the debt service to make up for lower interest earnings than the expected 5.6% assessment interest rate. Arbitrage Monitoring: The IRS is becoming more active in surveying municipal issuers. Presale, Report February 22, 20'1 t Pc,gr? 2