4.8. SR 12-17-2012 Elk REQUEST FOR ACTION
River
To Item Number
Mayor and City Council 4.8
Agenda Section Meeting Date Prepared by
Consent December 17,2012 Tim Simon,Finance Director
Item Description Reviewed by
Refunding the General Obligation Bonds, Series 2007B Cal Portner, City Administrator
Reviewed by
Action Requested
Council is asked to adopt the ordinance authorizing the issuance of General Obligation Refunding Bonds
by the Economic Development Authority (EDA).
Background/Discussion
On December 10,2012, the City Council reviewed the draft ordinance authorizing the issuance of
General Obligation Refunding bonds by the EDA and the bond issuance process. There are no changes
to the ordinance from that meeting.
On December 10,2012, the EDA approved a resolution providing for the sale of General Obligation
Refunding Bonds, Series 2013A, for an interest cost savings on the advance refunding of the General
Obligation Bonds,Series 2007B. The original proceeds of which were used for the acquisition and
betterment of an existing recreation facility (YMCA project). Per the lease agreement, the city is
responsible for two-thirds of the debt service payments and the YMCA the other one-third.
This ordinance is essentially the same ordinance adopted on the original issuance of the bonds,which
delegates the pricing to the EDA.
Financial Impact
At current rates which are subject to change,refunding the bonds will yield at a minimum a net present
value savings of over 8%. This should result in approximately$850,000 in savings over the next 20 years.
Attachments
• An ordinance authorizing the issuance of not to exceed$10,000,000 General Obligation
Refunding Bonds by the Economic Development Authority for the City of Elk River,Minnesota;
providing for the form and details thereof;and authorizing the Economic Development
Authority for the City of Elk River,Minnesota, to pledge the full faith,credit and resources of the
City of Elk River,Minnesota, for the security and payment of the bonds
Action Motion by Second by Vote
Follow Up
N:\Public Bodies\City Council\Council RCA\Agenda Packet\12-17-2012\YMCArefunding staff report.doc
ORDINANCE NO. 12- _
CITY OF ELK RIVER
AN ORDINANCE AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
$10,000,000 GENERAL OBLIGATION REFUNDING BONDS BY THE ECONOMIC
DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER, MINNESOTA;
PROVIDING FOR THE FORM AND DETAILS THEREOF; AND AUTHORIZING
THE ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER,
MINNESOTA, TO PLEDGE THE FULL FAITH, CREDIT AND RESOURCES OF
THE CITY OF ELK RIVER, MINNESOTA,
FOR THE SECURITY AND PAYMENT OF THE BONDS
THE CITY OF ELK RIVER,MINNESOTA,DOES ORDAIN:
SECTION 1. Recitals.
(a) The Economic Development Authority for the City of Elk River (the "EDA") has
the powers described in Minnesota Statutes, Sections 469.001 through 469.047, and Minnesota
Statutes,Section 469.090 to 469.108.
(b) The EDA proposes to refund its General Obligation Bonds, Series 2007B (the "Prior
Bonds"), the proceeds of which were used to finance the acquisition and betterment of a recreational
facility owned by the EDA and leased to YMCA of the Greater Twin Cities (formerly known as The
Young Men's Christian Association of Metropolitan Minneapolis, collectively, the "YMCA")) (the
"Project"). The City and the EDA believe that it is desirable and necessary that there be issued general
obligation refunding bonds to refund the Prior Bonds to achieve debt service cost savings.
(c) A public hearing on the issuance of the Bonds and the use of the Project by the YMCA
was held by the EDA on December 10,2012 following duly published notice,at which time all persons
that desired to speak were heard.
SECTION 2.Bonding Authorization.
(a) Pursuant to and in accordance with the provisions of this Ordinance and the
provisions of Minnesota Statutes, Section 469.102 and Chapter 475 and Section 147(f) of the Internal
Revenue Code of 1986, as amended (the"Code"), the consent of the City Council is hereby given to
the EDA to issue and sell the EDA's general obligation bond or bonds to which the full faith, credit
and resources of the City may and shall be pledged as payment and security therefor, in one or more
series, in fully registered form, and in an aggregate principal amount not to exceed $10,000,000 (the
"Bonds"), for the purpose of providing funds to assist in refunding the Prior Bonds,together with such
costs of issuance and related costs as may be incidental to the issuance of the Bonds. The EDA shall
set the date, denominations, place of payment, form, content, interest rates and details of the Bonds,
and the City Council hereby consents to the issuance and details of the Bonds, as so determined by the
EDA.The City Council hereby gives specific consent to the pledge of the City's full faith, credit, and
resources to the payment and security of the Bonds.
(b) The Mayor and City Clerk, or any other officers of the City authorized to act in their
place, (the"City Officials") are authorized and directed to execute on behalf of the City,as the obligated
415279v2 JSB EL185-21
person with respect to the Bonds, a continuing disclosure undertaking in accordance with the
provisions of Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934,as amended.
SECTION 3. Publication. This Ordinance, as adopted on the date hereof, shall be published in
the official newspaper of the City and the EDA.
SECTION 4.Effective Date.The effective date of this Ordinance shall be the date of its adoption.
THIS ORDINANCE was introduced and adopted by the City Council of the City of Elk
River,Minnesota on the 17th day of December,2012 by the following vote:
AYES:
NAYS:
APPROVED:
John J. Dietz,Mayor
ATTEST:
Tina Allard,City Clerk
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