4.9. SR 05-20-2013 Elk REQUEST FOR ACTION
River
TO ITEM NUMBER
Mayor and City Council 4.9
AGENDA SECTION MEETING DATE PREPARED BY
Consent May 20, 2013 Tim Simon, Finance Director
ITEM DESCRIPTION REVIEWED By
Resolution Providing for Redemption of 2005A Bonds Cal Portner, City Administrator
REVIEWED BY
ACTION REQUESTED
Adopt by motion a resolution providing for the redemption of certain outstanding General Obligation
Improvement Bonds, Series 2005A of the city.
BACKGROUND/DISCUSSION
On June 14, 2005, the City Council authorized the issuance of$1,070,000 General Obligation
Improvement Bonds for the 2005 Street Rehabilitation Project. The bonds have a final maturity of
February 1, 2016, and the true interest cost is 3.53 percent. 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 July 1, 2013.
The bonds have a call date of February, 1, 2012. With the approval of the new Pavement Management
Program and franchise fee implementation,the bonds can be called in and prepaid by the current Debt
Service Fund cash balance and the Street Improvement Reserve Fund. These bonds are General
Obligation Improvement Bonds of the city and have had a tax levy and special assessment repayments
from property owners that have paid previous principal and interest.
FINANCIAL IMPACT
The amount needed is $340,000 plus accrued interest. The funding will come from the 2005 Debt
Service Fund which has a cash balance of$111,785 and the Street Improvement Reserve Fund. The city
will save $18,772 in interest expense over the next three years.
ATTACHMENTS
■ Resolution providing for the redemption of certain outstanding General Obligation
Improvement Bonds, Series 2005A of the city
P O W E R E D BY
N:\Public Bodies\Agenda Packets\05-20-2013\X4.9 sr 2005A bonds.docx Na U R E
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, May 20,
2013, commencing at 6:30 P.M.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
RESOLUTION NO. 13-
RESOLUTION PROVIDING FOR THE REDEMPTION OF CERTAIN OUTSTANDING
GENERAL OBLIGATION IMPROVEMENT BONDS,SERIES 2005A OF THE CITY
BE IT RESOLVED By the City Council of the City of Elk River, Sherburne County,
Minnesota(the"City"), as follows:
1. The City has issued its General Obligation Improvement Bonds, Series 2005A,
dated June 14, 2005 (the`Bonds"), in the original aggregate principal amount of$1,070,000. The
Bonds maturing on February 1 in the years 2014 through and including 2016, in the aggregate
principal amount of$340,000 (the "Callable Bonds"), are subject to redemption and prepayment on
any date at a price of par plus accrued interest.
2. It is determined that it is in the sound financial management of the City that the
Callable Bonds be prepaid and redeemed on July 1, 2013, or such later date for which proper notice
of call may be given, and such bonds are hereby called for redemption on such date.
423468v1 JSB KG400-1
3. The City Finance Director is authorized and directed to request that U.S. Bank
National Association, the paying agent and bond registrar (the "Registrar"), mail the Notice of Call
for Redemption in substantially the form attached hereto as Exhibit A to the registered owners of
each Bond to be redeemed at the addresses shown on the registration books kept by the Registrar.
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.
Passed and adopted this 20th day of May, 2013.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
423468v1 JSB KG400-1 2
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2005A
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
July 1, 2013
all outstanding bonds of the City designated as General Obligation Improvement Bonds,
Series 2005A, dated June 14, 2005, having stated maturity dates of February 1 in the years 2014
through 2016, both inclusive, totaling $340,000 in principal amount:
Year of Maturity Amount CUSIP
2014 $110,000 287407 K25
2015 115,000 287407 K33
2016 115,000 287407 K41
The bonds are being called at a price of par plus accrued interest to July 1, 2013, on which date
all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption
are requested to present their bonds for payment at the main office of U.S. Bank National
Association, in St. Paul, Minnesota, on or before July 1, 2013.
If by mail: If by hand:
U.S. Bank National Association U.S- Bank National Association
Corporate Trust Operations 60 Livingston Avenue
60 Livingston Avenue 3rd Floor—Bond Drop Window
EP-MN-WS3C St. Paul, MN 55107
St_ Paul, MN 55107
Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation
Act of 2003, federal backup withholding tax will be withheld at the applicable backup
withholding rate in effect at the time the payment by the redeeming institutions if they are not
provided with your social security number or federal employer identification number, properly
certified. This requirement is fulfilled by submitting a W-9 Form, which may be obtained at a
bank or other financial institution.
Dated: May 20, 2013.
BY ORDER OF THE CITY COUNCIL
423468v1 JSB KG400-1 A-I