8.2. SR 01-17-2012REQUEST FOR ACTION
'rQ ITEM I~IUMBER
Ma or and Ci Council 8.2
AGENDA SECTION MEETING DATE PREPARED BY
General Business anu 17, 2012 Tim Simon, Finance Director
ITEM DESCRIPTION REVIEWED BY
Resolution Providing for the Sale of G.O. Improvement Cal Portner, Ci Administrator
Refunding Bonds, Series 2012B to Refund Existing G.O. Bonds, REVIEWED BY
Series 2007C for Interest Cost Savings
ACTION REQUESTED
The City Council is asked to adopt a resolution providing for the sale of $1,515,000 General Obligation
Improvement Refunding Bonds, Series 2012B to refund existing General Obligation Bonds, Series 2007C
for interest cost savings.
BACKGROUND/DISCUSSION
After every tax settlement and bond payment, the finance department reviews the various debt service
funds and outstanding bond issues to determine if sufficient cash exists to pay-off any outstanding bonds
and look at the current market for interest rates for refinancing opportunities.
On June, 4 2007, the city issued $3,090,000 in General Obligation Improvement Bonds, Series 2007C.
The bonds were used for the Deerfield and Irving Street improvement project. The bonds are repaid with
special assessments and an annual tax levy. Our debt policy requires a present value savings of 3% on
crossover refunding bond issues and the latest estimates show a savings of approximately 4%. With the
issuance of the bonds for the public works project, we are able to combine the two bond issues and
greatly reduce our issuance fees.
The refunding bonds will be sold thru a competitive sale on February 21, 2012, and the results will be
presented to the Council that evening.
FINANCIAL IMPACT
Current interest rates are approximately 4% and the new estimated interest rates should be just under
1.6%. The savings will occur over the remaining five years at a present value of slightly less than $70,000.
We will be able to adjust our portion of the tax levy starting in 2012 for taxes payable 2013. The source
of repayment will not change from the prior bonds: special assessments and tax levy.
ATTACHMENTS
• Resolution Providing for the Sale of $1,515,000 General Obligation Improvement Refunding
Bonds, Series 2012B
Action Motion by Second by Vote
PBi1EREl1 RC
A~U
RESOLUTION NO. 12-
RESOLUTION PROVIDING FOR THE SALE OF
$1,515,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS,
SERIES 20126
Council Member
introduced the following resolution and moved its adoption:
WHEREAS, the City Council of the City of Elk River, Minnesota, has heretofore determined that it
is necessary and expedient to issue the city's $1,515,000 General Obligation Improvement Refunding
Bonds, Series 20126 (the "Bonds"), to crossover refund the city's outstanding General Obligation
Improvement Bonds, Series 2007C; and
WHEREAS, the city has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as
its independent financial advisor for the Bonds 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 Elk River,
Minnesota, as follows:
1. Authorization; Findings. The City Council hereby authorizes Ehlers to solicit proposals for the
sale of the Bonds.
2. Meeting: Proposal Opening. The City Council shall meet at 6:30 p.m. on February 21, 2012, for
the purpose of considering proposals for and awarding the sale of the 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 Bonds and to execute and 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
and, after full discussion thereof and upon a vote being taken thereon,
the following Council Members voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
Dated this 17~' day of January, 2012.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk