4.1. SR 09-17-2001TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
Mayor and City Council
Pat Klaers, City Administrator
September 17, 200 I
Utilities Commission Update
Item 4. I.
Councilmember John Dietz is the City Council representative on the Elk River Municipal
Utilities Commission. At this September 17, 2001, City Council meeting, John is scheduled
to provide the Council with an update on Utilities activities. Attached for your review is the
agenda from the September 12, 2001, Utilities Commission meeting.
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ITEM NUMBER
1. Call meeting to order September 12, 2001 at 4:00 p.m.
ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
AGENDA
September 12, 2001
Elk River Utilities Offices
ACTION TAKEN
2. Consider Utilities Agenda
3. *Approval of previous meeting minutes
4. *Check Register
OLD BUSINESS
5.1 Review Proposed 2002 Capital Projects Budget
5.2 Update Well #7 and Water Tower Projects
5.3 Administration Building Update
5.4 LFG Project Update (Verbal)
NEW BUSINESS
6.1 Authorize Proposals for Additional Electric Line Truck
*Financials
Other Business
*Consent Agenda items are considered to be routine and will be approved by one motion.
Results of Bond Sale
City of Elk River
$3,590,000
G.O. Water Revenue Bonds, Series 2001
September 24, 2001
Low bid (TIC)
4.7327%
(Presale Report estimate - 5.22 %)
U.S. Bancorp Piper Jaffray
Number of bids 5
Range of bids 4.7327% to 4.9596%
Rating Moody's Investors Service
A3 rating confirmed (positive outlook)
AMBAC Insured
Recommended action Adopt
"Resolution Providing for the Issuance and Sale of the
City's $3,590,000 General Obligation Water Revenue
Bonds, Series 200lA".
Attachments
1. Tabulation of bids
2. Final debt service analysis
3. Comparison of recent sales
EHLERS
& ASSOCIATES INC
3060 Centre Pointe Drive Roseville, MN 55113-1105
651.697.8506 fax651.697.8506 www. ehlers-inc.com
BID TABULATION
$3,590,000 General Obligation Water Revenue Bonds, Series 2001A
City of Elk River, Minnesota
SALE: September 24, 2001
.AWARD: U.S. BANCORP PIPER JAFFRAY
RATING: AMBAC Assurance Corporation (Moody's Investors Service "Aaa")
BBI: 5.12%
NAME OF BIDDER
RATE MATURITY PRICE
(February 1)
NET TRUE
INTEREST INTEREST
COST RATE
U.S. BANCORP PIPER JAFFRAY
Minneapolis, Minnesota
WELLS FARGO BROKERAGE SERVICE INC.
Minneapolis, Minnesota
Morgan Stanley Dean Witter
Edward Jones
2.50% 2003
2.85% 2004
3.05% 2005
3.30% 2006
3.55% 2007
3.80% 2008
3.95% 2009
4.00% 2010
4.10% 2011
4.25% 2012
4.35% 2013
4.60% 2014-2015 Term**
4.75% 2016-2017 Term***
4.85% 2018-2019 Term ....
4.90% 2020-2022 Term .....
$3,538,088.60 $2,t31,462.23 4.7327%
CRONIN & CO., INC.
Minneapolis, Minnesota
SALOMON SMITH BARNEY
Chicago, Illinois
UBS PAINEWEBBER, INC.
Chicago, Illinois
MORGAN STANLEY DEAN WITTER
Chicago, Illinois
CIBC WORLD MARKETS
New York, New York
CITIZENS BANK
Flint, Michigan
KIRLIN SECURITIES
Syosset, New York
3.25% 2003-2005
3.30% 2006
3.50% 2007
4.00% 2008-2010
4.10% 2011
4.25% 2012
4.40% 2013
4.50% 2014
4.60% 2015
4.65% 2016
4.70% 2017
4.85% 2018-2019 Term
5.00% 2020-2022 Term
$3,538,809.25 $2,144,809.92 4.7610%
*AMBAC Insurance purchased by U.S. Bancorp Piper Jaffray.
**$380,000 Term Bond due 2015 with mandatory redemption in 2014-2015.
***$420,000 Term Bond due 2017 with mandatory redemption in 2016-2017.
***~.470,000 Term Bond due 2019 with mandatory redemption in 2018-2019.
** 795,000 Term Bond due 2022 with mandatory redemption in 2020-2022.
EHLERS
& ASSOCIATES INC
LEADERS IN PUBLIC FINANCE
3060 Centre Pointe Drive, Roseville, MN 55113-1105
651.697.8500 fax 651.697.8555 www.ehlers-inc.com
Offices in Roseville, MN, Brookfield, WI and Naperville, IL
$3,590,000 General Obligation Water Revenue Bonds, Series 2001A
City of Elk River, Minnesota
Paae 2
NAME OF BIDDER
RATE MATURITY
(February 1)
PRICE
NET
INTEREST
COST
TRUE
INTEREST
RATE
STEPHENS, INC.
Nashville, Tennessee
4.125% 2003-2010
4.15% 2011
3.30% 2012
4.40% 2013
4.50% 2014
4.55% 2015
4.65% 2016
4.80% 2017-2018
4.875% 2019-2022
$3,536,150.00
$2,151,044.05
4.7923%
DAIN RAUSCHER INC.
Minneapolis, Minnesota
3.00% 2003
3.25% 2OO4
3.50% 2005-2006
3.60% 2007
3.80% 2008
3.90% 2009
4.00% 2010
4.125% 2011
4.25% 2012
4.40% 2013
4.55% 2014
4.65% 2015
4.75% 2016
4.85% 2017
4.90% 2018
5.00% 2019-2022 Term
$3,536,297.36
$2,165,952.64
4.8099%
MILLER JOHNSON STEICHEN KINNARD
INVESTMENT SECURITIES, INC.
Minneapolis, Minnesota
BERNARDI SECURITIES, INC.
Chicago, Illinois
3.70% 2003-2007
3.90% 2008
4.00% 2009
4.10% 2010
4.20% 2011
4.30% 2012
4.40% 2013
4.50% 2014
4.65% 2015
4.80% 2016
5.00% 2017-2022 Term
$3,535,073.00
$2,185,983.67
4.8596%
REOFFERING YIELDS
2003 2.50%
2004 2.85%
2005 3.05%
2006 3.30%
2007 3.55%
2008 3.80%
2009 3,95%
2010 4.00%
2011 4,10%
2012 4.30%
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
4.4O%
4.6O%
4.60%
4.75%
4.75%
4.85%
4.85%
4.95%
4.95%
4.95%
FINAL - Results of Sale
Date
2/1/2002
2/1/2003
2/1/2004
2/1/2005
2/1/2006
2/1/2007
2/1/2008
2/1/2009
2/1/2010
2/1/2011
2/1/2012
2/1/2013
2/1/2014
2/1/2015
2/1/2016
2/1/2017
2/1/2018
2/1/2019
2/1/2020
2/1/2021
2/1/2022
TOTAL
City of Elk River
G.O. Water Revenue Bonds, Series 2001A
Principal Rate Interest
P&I
268,073.33
274,555.00
276,135.00
277,322.50
278,032.50
278,240.00
282,920.00
281,995.00
280,795.00
284,235.00
287,010.00
284,180.00
285,670.00
286,700.00
286,962.50
291,750.00
290,595.00
288,955.00
291,705.00
293,720.00
60,000
120,000
125,000
130,OOO
135 000
140 000
150 000
155000
160.000
170000
180 000
185,000
195,000
205,000
215,000
230,000
240,000
250,000
265,000
280,000
3,590,000
2.500%
2.850%
3.050%
3.300%
3.550%
3.800%
3.950%
4.000%
4.100%
4.250%
4.350%
4.600%
4.600%
4.750%
4.750%
4.850%
4.850%
4.900%
4.900%
4.900%
208,073.33
154,555.00
151,135.00
147,322.50
143,032.50
138,240.00
132,920.00
126,995.00
120,795.00
114,235.00
107 010.00
99 180.00
90 670.00
81 700,00
71 962.50
61 750.00
50 595.00
38 955.00
26 705.00
13720.O0
2,079 550.83
5,669,550.83
Fiscal
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Annual
Revenue
268,073
274,555
276,135
277,323
278,033
278,240
282,920
281,995
280,795
284 235
287 010
284 180
285 670
286 700
286 963
291750
290,595
288,955
291,705
293,720
Dated
Delivery Date
First Coupon Date
Bond Year Dollars
Average Life
Average Coupon
Net Interest Cost (NIC)
True Interest Cost (TIC)
10/01/2001
10/01/2001
8/01/2002
45,062
12.552 Years
4.61490%
4.73010%
4.73275%
Ehlers & Associates, Inc. 9/24/2001 [Water200 lA]
Comparison of Sale Results
Elk River
9/24/2001
AMBAC
Goodview
9/10/2001
FGIC
Kandiyohi
County
9/4/2 O01
MBIA
Hutchinson
8/28/2001
A3
Hugo
8/20/2001
MBIA
2OO3
2OO4
2005
2OO6
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2.50
2.85
3.05
3.30
3.55
3.80
3.95
4.00
4.10
4.25
4.35
4.60
4.60
4.75
4.75
4.85
4.85
4.90
4.90
4.90
2.75
3.00
3.10
3.20
3.45
3.70
3.90
4.00
4.10
4.20
4.30
4.40
4.50
4.55
4.60
4.65
2.65
2.90
3.10
3.30
3.55
3.70
3.875
4.00
4.10
4.15
4.30
4.40
4.55
4.625
4.65
4.70
4.75
4.80
4.85
4.85
2.70
3.00
3.25
3.40
3.60
3.75
3.90
4.00
4.125
4.25
Reoffering
2.75
3.05
3.25
3.45
3.60
3.80
3.95
4.05
4.125
4.25
4.35
4.45
4.55
4.65
4.70
5.00
4.50
4.00
3.50
3.00
2.50
2.00
~' El k River
Goodview
+ Kandiyohi County
)[ Hutchinson
--e-- Hugo
Ehlers & Associates, Inc.
ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
September 12, 2001
Members Present: George Zabee, President; James Tralle, Vice Chair; John Dietz, Trustee
Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent; David Berg, Water
Superintendent; Patricia Hemza, Office Manager ..
Others Present: Pat Klaers, City Administrator
1. Call meeting to order September 12, 2001 at 4:00 p.m.
2. Consider Utilities Agenda
Bryan Adams will have two additional items to be discussed under Other Business.
James Tralle moved to approve the Utilities Agenda for September 12, 2001, with two additional items
to be discussed under Other Business. John Dietz seconded the motion. Motion carried 3-0.
3. Consider Consent Agenda
James Tratle moved to approve the Consent Agenda as follows:
August Check Register
Financials
August 14, 2001 Minutes
John Dietz seconded the motion. Motion carried 3-0.
5.1 Review Proposed 2002 Capital Projects Budget
Bryan Adams reviewed the 2002 Capital Budget, with the 10 year Capital and back-up details for the
information and consideration of the commission. John Dietz questioned vehicle needs, the mileage, and ages
of trucks. George Zabee asked Staff to explain the Vac Tron Excavator. Normal distribution construction was
also discussed. This item was informational only at this meeting.
5.2 Update Well//7 and Water Tower Projects
The Commission was updated on the Water Treatment Facility #7 and Water Tower Update, which
appear to on the anticipated schedule. The bond sale had been scheduled to take place on September 17, 2001.
Due to the events in New York, the sale will be delayed until the appropriate time for a bond sale resumes. No
action necessary.
Page 2
Regular meeting of the Elk River Municipal Utilities Commission
September 12, 2001
5.3 Administration Building Update
The possibility of a larger administration building has been considered since 1999, with several sites
having been explored. Pat Klaers appeared to speak of the wishes of City Council, and City Staff to have the
Utilities located at City Hall. A strong case by the City Administrator was presented, including the fact that the
land for the office area for the Utilities would be at no cost, the Utility area could be custom designed, a central
telephone system, common rooms for employees, and one-stop shopping for builder/developer customers. It
was also noted that the sharing of personnel policies, as well as the sharing of employees would be possible if
the Utilities shared City Hall.
George Zabee voiced his concerns that the City would be in a position to gradually absorb the Utility.
John Dietz and James Tralle noted that they feel the downtown area has gone by the way-side, and that new
offices at City Hall' appears to be a more attractive option than other possibilities. George Zabee contends that
he would like to make an offer on the land on Jackson Avenue. Pat Klaers, John Dietz, and James Tralle
explained their concerns with that site.
The points that were agreed upon were, a. the present Utility building should not have extensive
remodeling, and b. the First National Insurance/Mortgage building is of an age that makes it a risky choice.
Utility Staff would prefer to remain in the downtown area to accommodate the customers who presently walk
in, and support the downtown Chamber of Commerce. The Commission desires to pursue the option of sharing
City Hall.
5.4 LFG Project Update
Bryan Adams apprised the Commission that the County is presently in budgeting, and are slightly
apprehensive of the project at this time. However, meetings with Sherburne County to address issues were
scheduled, but due to events in New York, the meetings have been delayed. Staff is hopeful that the project
will continue to move forward.
6.1 Authorize Proposals for Additional Electric Line Truck
Staff reviewed the reasons for adding an additional electric line truck to initiate a service crew for
maintenance.
John Dietz moved to authorize Staff to solicit quotations for an additional Line Truck, with award at the
November, 2001 Commission meeting. George Zabee seconded the motion. Motion carried 3-0.
Other Business
Bryan Adams updated the Commission on the decision by the City to leave ownership of sewer lines as it is.
The question before the Commission is how they wish to handle the water services line. It appears that the
authority to certify improvements for repair of broken water service lines presently exists, and that no change in
the Ordinance would be necessary. Pat Klaers will check the Ordinance as it pertains to the Utility.
Page 3
Regular meeting of the Elk River Municipal Utilities Commission
;eptember 12, 2001
Bryan Adams feels the certification for improvements for customers would be an acceptable alternative to
offering an insurance policy. Pat Klaers is concerned that if word of the authorizations for certification of
public improvements should spread, that all customers would ask for the privilege. Staff indicated that on the
average, there are one or two breaks per year.
Bryan Adams advised the Commission that John Weicht has requested relief from the payment of WAC fees
for building being erected in Lions Park that will ultimately be given to the City. The City of Elk River has
waved the SAC'fees. Bryan questioned the willingness of the Utilities Commission to donate WAC fees.
James Tralle moved to forego the WAC fees for the building being erected by John Weicht in Lions Park. John
Dietz seconded the motion. Motion carried 3-0.
The next regularly scheduled meeting of the Elk River Municipal Utilities will be Tuesday, October 9, 2001 in
the Elk River Utilities Offices.
Adjournment
President Zabee adjourned the meeting of the Elk River Municipal Utilities Commission at 6:00 PM.
Respectfully submitted,
Patricia Hemza
Office Manager