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HomeMy WebLinkAboutCC RES 03-064 A RESOLUTION PROVIDING FOR THE SALE OF $630,000 GENERAL OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2003D Meeting Sheet IIIIII VIII VIII VIII VIII VIII IIII IIII 104553 Box: 31 Folder: RES 2003 Document: CC RES 03-064 A RESOLUTION PROVIDING FOR THE SALE OF $630,000 GENERAL OBLIGATION REFUNDING IMPROVEMENT BONDS, SERIES 2003D • Resolution No. 03 - 064 Council Member_S� r ,5 introduced the following resolution and moved its adoption: Resolution Providing for the Sale of $630,000 General Obligation Refunding Improvement Bonds, Series 2003D A. WHEREAS, the City Council of the City of St. Anthony, Minnesota (the "City"), has heretofore determined that it is necessary and expedient to issue the City's$630,000 General Obligdtion Refunding Improvement Bonds,Series 2003D,to achieve cost savings by refinancing bonds eligible for refunding at lower interest rates by the issuance of the Series 2003D Bonds in order to provide for the current refunding of the outstanding portion of the City's$525,000 General Obligation Improvement Bonds of 1994B;$470,000 General Obligation Improvement Bonds of 1993A;and$825,000 General Obligation Improvement Bonds of 1995(the"Refunded Bonds"). B. WHEREAS,the City has retained Ehlers&Associates,Inc., in Roseville,Minnesota("Ehlers"), as its independent financial advisor for the Series 2003D and is therefore authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of St. Anthony, Minnesota, as follows: 1. Authorization:Findings. The City Council hereby authorizes Ehlers to solicit proposals for the sale of the • Series 2003D Bonds. 2, Meeting;Proposal Opening. The City Council shall meet at 7:00 P.M. on September 23,2003, for the purpose of considering sealed proposals for and awarding the sale of the Series 2003D Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Series 2003D Bonds and to deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by Council Member N/A and, after full discussion thereof and upon a vote being taken thereon, the following Council Members voted in favor thereof. 5Park5, 4oAeon, Horst-) (-aL{.5f, T�1ue.Sev) and the following voted against the same: lel c n e- Adopted this day of J 003. yor ATTEST: • City Clerk Reviewed for Administration: ld City ger • CITY OF ST. ANTHONY, MINNESOTA PRESALE REPORT AUGUST 12, 2003 Proposed Issues: $630,000 General Obligation Refunding Improvement Bonds, Series 2003D Purpose: To achieve cost savings by refinancing bonds eligible for refunding at lower interest rates by the issuance of the Series 2003D Bonds in order to provide for the current refunding of the outstanding portion of the City's $525,000 General Obligation Improvement Bonds of 1994B; $470,000 General Obligation Improvement Bonds of 1993A; and $825,000 General Obligation Improvement Bonds of 1995 (the"Refunded Bonds"). Description: Ehlers&Associates routinely reviews outstanding bond issues to assess potential for cost savings. This review indicated cost savings could be achieved by refunding the above-named issues. Ehlers has established criteria that provide guidance regarding the level of savings, which should be achieved prior to recommending refunding. In addition, State and Federal regulations provide criteria for refunding of existing debt. This issue meets both criteria. Term/Call Feature: The Series 2003D Bonds will combine the Refunded Bonds and will retain the • debt repayment period within those original issues. The term of the Series 2003D Bonds will be 7 years and will be callable in February 2008 for bonds maturing in 2009. Funding Sources: The Series 2003D Bonds will be paid from the same sources as the original debt, which includes assessments and debt levy. The savings from the refunding will reduce the debt levy requirements. Discussion Issues: Bond interest rates have been at near record lows but are rising. A number of factors, including world events and economic conditions in general, may impact rates prior to the sale date scheduled for September 9. Ehlers will review market conditions prior to sale and will advise the City if it appears minimum savings will be achieved. If it appears that the City will not be in a position to achieve the savings necessary to justify the refunding, Ehlers will recommend that the sale be delayed or cancelled. Given current interest rates, the Series 2003D Bonds are projected to achieve a net current value savings of about 5.6%or$50,000 over the life of the issue. This estimated savings does not reflect the benefit of"pre-paying" bonds with cash received from advanced payment of assessments. A revised debt levy reflecting the remaining assessment and the new rates is expected to reflect reduced impact on taxpayers. The net impact of the reduced interest rate on the new bonds and prepayment is shown in the table below. • Prepared by Ehlers & Associates, Inc. • Year Estimated Savings Average Savings 2004 72,000 21.31 2005 71,000 21.02 2006 70,000 20.72 2007 69,000 20.43 2008 51,000 15.10 2009 40,000 11.84 Schedule: Pre-Sale Review: August 12, 2003 Distribute Official Statement: Week of August 25, 2003 Bond Sale: September 9, 2003 Estimated Closing Date: October, 2003 • Attachments: Sources and Uses of Funds Proposed Debt Service Schedule Bond Buyer Index Resolution authorizing Ehlers to proceed with bond sale Ehlers Contacts: Financial Advisors: Mark Ruff and Jim Prosser Bond Analysts: Diana Lockard (651) 697-8534 Debbie Holmes(651) 697-8536 Bond Sale Coordinator: Connie Kuck (651) 697-8527 The Official Statement for this financing will be mailed to the Council Members at their home address for review prior to the sale date. • Prepared by Ehlers & Associates, Inc.