2.4. ERMUSR 06-11-2013 tc3
Elk River .L
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Theresa Slominski, Finance and Office Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
June 11, 2013 2.4
SUBJECT:
Resolution for the Redemption of Electric Bonds 2004A
BACKGROUND:
Mark Ruffs,bond consultant with Ehlers& Associates, provides advice on calling, refunding, and issuing
bonds for the City of Elk River and Elk River Municipal Utilities. Mark came out in May and met with
me to review our current bond issues and make recommendations for our consideration.
DISCUSSION:
We have two debt issues that can be called in 2014(2006A and 2007A)and could consider refunding
next year, and can be reviewed at a later date. The 2004A bond issue has a remaining principal balance of
$225,000, and will mature February 2015. This issue can be prepaid in 2013 or included with a later
refunding. It makes more sense to prepay this now rather than refund later. This bond issue had a Debt
Service Requirement(DSR) of$94,000 to apply towards the final payment of the bond, leaving$131,000
for the Utility to pay for the redemption, plus related costs. Redeeming this issue in August, we save
$14,395 in interest payments through 2015. A spreadsheet is attached, providing the information related
to the existing remaining payments and DSR application for redemption.
Given the City of Elk River is the qualified entity to issue bonds,the resolution must be approved by the
City Council to be effective. Mark, on our behalf, requested Kennedy and Graven to prepare the
necessary resolutions for the Utility Commission and City Council to act upon in order to redeem this
bond issue. Successful action from the Utility at the June 11 meeting would bring it before the City
Council on June 17 for action. The resolutions are attached for your review.
ACTION REQUESTED:
Staff recommends that the Commission authorize and request the City Council to redeem the 2004A
Electric Bonds in August 2013, per the attached resolution.
Page 1 of 1
Rr3 U AT UR��e t IP IF�A�
Reliable Public
Power Provider
Electric Revenue Bonds,Series 2004A Redemption
Debt Service Schedule
'Date Principal Coupon Interest Total P+l Fiscal Total
8/1/2013 - 4,753.75 4,753.75 4,753.75
2/1/2014 110,000.00 4.20% 4,753.75 114,753.75
8/1/2014 - 2,443.75 2,443.75 117,197.50
2/1/2015 115,000.00 4.25% 2,443.75 117,443.75
8/1/2015 - - - 117,443.75
Total 225,000.00 14,395.00 239,395.00
Funding Sources
Transfer from DSR Funds 94,000.00
ERMU Payment 131,000.00
Total 225,000.00
Additional Costs
Ehlers Fee 250.00
Kennedy&Graven Fee 350.00
600.00
EXTRACT OF MINUTES OF MEETING OF THE
ELK RIVER UTILITIES COMMISSION
•
HELD: June 11, 2013
Pursuant to due call and notice thereof, a regular meeting of the Elk River Utilities
Commission, was duly held at the in said City on the 11`h day of June,
2011, at .M.
The following commissioners were present:
and the following were absent:
Commissioner introduced the following resolution and moved
its adoption:
RESOLUTION CONCURRING IN THE ACTION OF THE CITY COUNCIL
OF THE CITY OF ELK RIVER IN PROVIDING FOR THE REDEMPTION OF CERTAIN
OUTSTANDING ELECTRIC REVENUE BONDS, SERIES 2004A
WHEREAS, on June 17, 2013, the City Council of the City of Elk River (the "City") will
consider a resolution (the "Resolution") providing for the redemption of the City's Electric
Revenue Bonds, Series 2004A, dated August 1, 2004 (the "Bonds") maturing on February 1 in
the years 2014 and 2015, in the aggregate principal amount of$225,000 (the "Callable Bonds")
on August 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
NOW, THEREFORE, BE IT RESOLVED by the Elk River Utilities Commission, as
follows:
1. The Commission hereby authorizes and requests the City Council to call for
redemption on August 1, 2013, or such later date, the City's Electric Revenue Bonds, Series
2004A, dated August 1, 2004 maturing on February 1 in the years 2014 and 2015, in the
aggregate principal amount of$225,000.
2. This resolution shall have no force and effect if the City Council does not adopt
the Resolution on June 17, 2013.
The motion for the adoption of the foregoing resolution was seconded by member
and upon a vote being taken thereon, the following voted in
favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
424982v1 JSB EL185-18
STATE OF MINNESOTA )
COUNTY OF SHERBURNE) SS
CITY OF ELK RIVER )
I, the undersigned, being the duly qualified and acting Secretary of the Elk River Utilities
Commission, DO HEREBY CERTIFY that I have carefully compared the attached and
foregoing extract of minutes of a meeting of the Municipal Utilities Commission of said City,
held on the date therein indicated, with the original thereof on file and of record in my office and
that the same is a full, true and complete transcript insofar as the same relates to the redemption
of Electric Revenue Bonds, Series 2004A.
WITNESS my hand as Secretary this day of , 2013.
Secretary of the Elk River Utilities Commission
424982v1 JSB ELI85-18
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, June 17,
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.
RESOLUTION PROVIDING FOR THE REDEMPTION OF CERTAIN OUTSTANDING
ELECTRIC REVENUE BONDS, SERIES 2004A 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 Electric Revenue Bonds, Series 2004A, dated August 1, 2004
(the"Bonds"), in the original aggregate principal amount of $940,000. The Bonds maturing on
February 1 in the years 2014 and 2015, in the aggregate principal amount of $225,000 (the
"Callable Bonds"), are subject to redemption and prepayment on any date at a price of par plus
accrued interest.
2. The Elk River Utilities Commission has requested, and it is determined that it is in
the sound financial management of the City, that the Callable Bonds be prepaid and redeemed on
August 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.
423469v2 JSB ELI85-18
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.
423469v2 JSB ELI85-18 2
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.
423469v2 JSB ELI 85-18 3
STATE OF MINNESOTA )
COUNTY OF SHERBURNE )
SS.
CITY OF ELK RIVER )
I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River,
Minnesota(the "City"), do hereby certify that I have carefully compared the attached and foregoing
extract of minutes of a regular meeting of the City Council held on Monday,June 17, 2013, with the
original thereof on file in my office and the same is a full, true and complete transcript therefrom
insofar as the same relates to the prepayment and redemption of Electric Revenue Bonds, Series
2004A of the City.
WITNESS My hand as City Clerk this day of June, 2013.
City Clerk
City of Elk River, Minnesota
423469v2 JSB EL185-18
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
ELECTRIC REVENUE BONDS, SERIES 2004A
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
August 1, 2013
all outstanding bonds of the City designated as Electric Revenue Bonds, Series 2004A, dated
August 1, 2005, having stated maturity dates of February 1 in the years 2014 and 2015, totaling
$225,000 in principal amount:
Year of Maturity Amount CUSIP
2014 $110,000 287423 AJ6
2015 115,000 287423 AK3
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 3`d 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: June 17,2013.
BY ORDER OF THE CITY COUNCIL
423469v2 MB EL185-18 A-1
EXTRACT OF MINUTES OF MEETING OF THE
ELK RIVER UTILITIES COMMISSION
HELD: June 11, 2013
Pursuant to due call and notice thereof, a regular meeting of the Elk River Utilities
Commission, was duly held at the u+;tttt.Es (owc. in said City on the 11`h day of June,
2011, at 3' 35- P.M.
The following commissioners were present:
and the following were absent:
Commissioner ci MA pson introduced the following resolution and moved
its adoption:
RESOLUTION CONCURRING IN THE ACTION OF THE CITY COUNCIL
OF THE CITY OF ELK RIVER IN PROVIDING FOR THE REDEMPTION OF CERTAIN
OUTSTANDING ELECTRIC REVENUE BONDS, SERIES 2004A
WHEREAS, on June 17, 2013, the City Council of the City of Elk River (the "City") will
consider a resolution (the "Resolution") providing for the redemption of the City's Electric
Revenue Bonds, Series 2004A, dated August 1, 2004 (the "Bonds") maturing on February 1 in
the years 2014 and 2015, in the aggregate principal amount of$225,000 (the "Callable Bonds")
on August 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
NOW, THEREFORE, BE IT RESOLVED by the Elk River Utilities Commission, as
follows:
1. The Commission hereby authorizes and requests the City Council to call for
redemption on August 1, 2013, or such later date, the City's Electric Revenue Bonds, Series
2004A, dated August 1, 2004 maturing on February 1 in the years 2014 and 2015, in the
aggregate principal amount of$225,000.
2. This resolution shall have no force and effect if the City Council does not adopt
the Resolution on June 17, 2013.
The motion for the adoption of the foregoing resolution was seconded by member
01..., tick*. and upon a vote being taken thereon, the following voted in
favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
424982v1 JSB EL185-18
STATE OF MINNESOTA )
COUNTY OF SHERBURNE) SS
CITY OF ELK RIVER
I, the undersigned, being the duly qualified and acting Secretary of the Elk River Utilities
Commission, DO HEREBY CERTIFY that I have carefully compared the attached and
foregoing extract of minutes of a meeting of the Municipal Utilities Commission of said City,
held on the date therein indicated, with the original thereof on file and of record in my office and
that the same is a full, true and complete transcript insofar as the same relates to the redemption
of Electric Revenue Bonds, Series 2004A.
WITNESS my hand as Secretary this I\t`"day of J✓K f , 2013.
Secre ary of the Elk River Utilities Commission
424982v1 JSB EL185-18