2019.03.04 CC Packet - Laserfiche WebLink

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CITY OF ,4HUG0 EST. 1906 14669 Fitzgerald Avenue North, Hugo, MN55038 • (651) 762-6300 • www.ci.hugo.mn.us TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Ron Otkin, Finance Director SUBJECT: Resolution Authorizing the Call of the Outstanding G.O. Imp. Bonds of 2007 DATE: For the City Council Meeting of March 4, 2019 DESIRED COUNCIL ACTION Adoption of Resolution Authorizing the Call of the Outstanding G.O. Imp. Bonds of 2007 On September 17, 2007, the City issued $1,230,000 of G.O. Improvement Bonds and used the proceeds to construct public improvements on 129th Street and Oakshore Park Subdivision. The bonds were issued for 15 years with interest rates ranging from 4.0% to 4.15%. Assessments totaling $1,677,627 were levied against benefiting parcels to finance bond repayment. No property taxes have been levied for this bond issue. As of today the remaining principal on the bonds is $260,000. As is common with special assessment projects, many of the assessments were either prepaid or paid off early. The balance of special assessments to be collected is only $25,306. This has resulted in a fund balance that is sufficient to pay off the remaining bond principal. After factoring in the cost of redemption, the financial analysis prepared by Springsted calculates a Net Present Value benefit of $20,640 or 7.25% of the refunded debt service. Thus, sufficient savings will be realized to proceed with the early retirement of these bonds. RECOMMENDATION Staff is recommending the City Council approve a resolution that "calls" these bonds on May 1, 2019. Resolution Authorizing the Call of the Outstanding G.O. Imp. Bonds of 2007 Financial Analysis of Net Present Value Benefit (prepared by Springsted)