4.1. SR 11-14-2011~]` REQUEST FOR ACTION
~.,,:
.i.:ver
TO ITEM NUMBER
Ma or and Ci Council 4.1.
AGENDA SECTION MEETING DATE PREPARED BY
Consent November 14, 2011 Tim Simon, Finance Director
ITEM DESCRIPTION REVIEWED By
Ice Arena Debt Payoff Cal Portner, Ci Administrator
A. Resolution Providing for the Prepayment and REVIEWED BY
Redemption of Certain Outstanding General Obligation
Bonds
B. Resolution Authorizing a Transfer from the GRE
Reserve Fund to the 1996c Ice Arena Bonds Debt
Service Fund
ACTION REQUESTED
City Council is asked to adopt the following resolutions:
A. Providing for the prepayment and redemption of certain outstanding General Obligation
Bonds of the city, and
B. Authorizing a transfer from the GRE Reserve Fund to the 1996C Ice Arena Bonds Debt
Service Fund.
BACKGROUND/DISCUSSION
In 1996, the City Council authorized the issuance of $2,100,000 General Obligation Ice Arena Bonds for
construction of the Olympic rink. The bonds have a final maturity of December 1, 2013, and the interest
rate is 5.7 percent. On November 7, the Council discussed prepaying the 1996C General Obligation Ice
Arena Bonds and directed staff to proceed with a resolution authorizing the calling of those bonds.
Under the terms of the bond sale, notice must be given to the bond holders at least 15 days prior to the
redemption in whole or in part. Upon Council approval, staff will provide written notice and prepay the
bonds on December 1, 2011, which is the next scheduled semi-annual payment date.
FINANCIAL IMPACT
The amount needed, in addition to the scheduled principal and interest on December 1, 2011, will be
$370,000 plus any accrued interest if we go beyond December 1, 2011. The funding will come from the
GRE Reserve Fund (peaking plant payment). The city will save $31,920 in interest expense over the next
two years.
ATTACHMENTS
^ Resolution providing for the prepayment and redemption of certain outstanding General
Obligation Bonds of the City of Elk River
^ Resolution authorizing the transfer from the GRE Reserve Fund to the 1996C Ice Arena
Bonds Debt Service Fund
Action Motion by Second by Vote
P I4 • f R f® 8~
N:\Public Bodies\City Council\Counal RCA\Agenda Packet\11-142011\prepaymentoficearenabonds[1].docx
Extract of Minutes of Meeting of the
City Council of the City of Elk River,
Sherburne County, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the Council of the City of Elk
River, Minnesota, was duly held in the City Hall in the City of Elk River, on Monday, November
14, 2011, commencing at 6:30 P.M.
The following members were present:
and the following were absent:
Member
introduced the following written resolution and moved its
adoption, the reading of which was dispensed with by unanimous consent:
RESOLUTION NO. I I -
RESOLUTION PROVIDING FOR THE PREPAYMENT AND
REDEMPTION OF CERTAIN OUTSTANDING
GENERAL OBLIGATION BONDS OF THE CITY
BE IT RESOLVED By the City Council of the City of Elk River, Sherburne County,
Minnesota, as follows:
1. The City has issued and sold its General Obligation Ice Arena Bonds, Series 1996C,
dated July 16, 1996 (the `Bonds' in the total principal amount of $2,100,000. Bonds maturing on or
after July 16, 1996, are subject to redemption and prepayment on July 16, 1996 and on any date
thereafter at a price of par plus accrued interest.
2. It is determined that it is in the best interests of the sound financial management of the
Ciry that Bonds maturing on December 1 in the years 2012 to and including 2013, comprising all of the
Bonds subject to redemption, be prepaid and redeemed on December 1, 2011 and those Bonds are
hereby called for redemption on that date.
3. The Finance Director is authorized and directed to distribute a notice of call fox
redemption of the Bonds in the form attached hereto as EXHIBIT A to the registered owner of each
Bond to be redeemed at the address shown on the registration books kept by the Finance Director.
The motion for the adoption of the foregoing resolution was duly seconded by Member
. and upon vote being taken thereon, the following voted in favor thereof
and the following voted against:
whereupon said resolution was declared duly passed and adopted this 14~' day of November 2011.
John J. Dietz, Mayor
ATTEST
Tina Allard, Ciry Clerk
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$2,100,000
GENERAL OBLIGATION ICE ARENA BONDS, SERIES 1996C
CITY OF ELK RIVER
SHERBURNE COUNTY, MINNESOTA
NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Elk River,
Sherburne County, Minnesota, there have been called for redemption and prepayment on
DECEMBER 1, 2011
all outstanding bonds of the Ciry designated as General Obligation Ice Arena Bonds, Series 1996C,
dated July 16, 1996, having stated maturity dates of December 1 in the years 2012 through 2013,
both inclusive, totaling $370,000 in principal amount:
Year of Maturity Amount
2012 $180,000
2013 190,000
Of which the following maturity schedules are attributable to each original purchaser:
Bond R-1 Bank of Elk River
Year of Maturity Amount
2012 $75,000
2013 80,000
Bond R-2 First National Bank of Elk River
Year of Maturity Amount
2012 $75,000
2013 80,000
Bond R-3 Wells Fargo, National Association (originally State Bank of Rogers)
Year of Maturity Amount
2012 $30,000
2013 30,000
The bonds are being called at a price of par plus accrued interest to December 1, 2011 on which
date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for
393370v1 SJB CL162-46
redemption are requested to present their bonds for payment at City Hall, on or before December 1,
2011.
Dated.
BY ORDER OF THE CITY COUNCIL
By
Tina Allard, City Clerk
City of Elk River, Minnesota
393370v1 SJB CL162-46
RESOLUTION I I -
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION AUTHORIZING A TRANSFER FROM THE GRE RESERVE
FUND TO THE 1996C ICE ARENA BONDS DEBT SERVICE FUND
WHEREAS, The Ciry Council approved prepaying the 1996C Ice Arena Bonds on
November 14, 2011, and,
WHEREAS, The City Council has reviewed the request and determined it to be a sound
financial practice; and,.
WHEREAS, It has been determined that an amount not to exceed $370,000 will be
transferred out of the GRE Reserve Fund to provide funding for the prepayment of the
1996C Ice Arena Bonds;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elk
River makes the following transfer of funds from the GRE Reserve Fund:
1996C Ice Arena Bonds Debt Service Fund $370,000
Passed and adopted this 14~' day of November 2011.
John J Dietz, Mayor
ATTEST:
Tina Allard, City Clerk