5.11. SR 08-14-2000~ity of
River
M£MORANDUM
Item #5.11.
TO:
FROM:
DATE:
SUBJECT:
Mayor & City Council
Klaers, City Adminis~r
Pat
August 14, 2000
Financial Consultants
In July 2000, two financial consulting firms made presentations to the City
Council regarding their experience and expertise. These two firms were
Ehlers and Associates, Inc., and Springsted, Inc.
The city's financial needs have evolved over the years and currently staff sees
the need for additional financial services beyond bonding. In general, the city
would like to work with the financial consultants in the development and
implementation of a long-range financial strategic plan.
Both firms have extensive experience in municipal bonds and both firms
appear to be capable of providing additional financial consulting services. The
fees for services charged by each firm are similar. The decision by the City
Council on which firm to use for bonding and financial consulting services
depends on their comfort level with the two firms. The city has worked with
Springsted in the past and would be comfortable continuing this working
relationship. On the other hand, staff would also be able to work with Ehlers
and would be comfortable establishing a working relationship with this firm
as we have previously worked with Rusty Fifield.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
~ity of
River
M£MORANDtlM
Item #S. 1 1.
TO:
FROM:
DATE:
SUBJECT:
Mayor & City Council
Klaers, City Adrninis~r
Pat
August 14, 2000
Financial Consultants
In July 2000, two financial consulting firms made presentations to the City
Council regarding their experience and expertise. These two firms were
Ehlers and Associates, Inc., and Springsted, Inc.
The city's financial needs have evolved over the years and currently staff sees
the need for additional financial services beyond bonding. In general, the city
would like to work with the financial consultants in the development and
implementation of a long-range financial strategic plan.
Both firms have extensive experience in municipal bonds and both firms
appear to be capable of providing additional financial consulting services. The
fees for services charged by each firm are similar. The decision by the City
Council on which firm to use for bonding and financial consulting services
depends on their comfort level with the two firms. The city has worked with
Springsted in the past and would be comfortable continuing this working
relationship. On the other hand, staff would also be able to work with Ehlers
and would be comfortable establishing a working relationship with this firm
as we have previously worked with Rusty Fifield.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
EHLERS
& ASSOCIATES INC
August 3, 2000
Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
Elk River, MN 55330-0490
Dear Mayor Klinzing:
On August 14, you will choose a financial advisor for the City of Elk River. During our
presentation, we sought to highlight the factors that make Ehlers & Associates uniquely
qualified to be your financial advisor. As you consider your options, you must ask "What
distinguishes one financial advisor from another?" Ehlers believes the difference is value.
Ehlers creates value for Elk River. This value leads to economic benefits.
Such statements are hollow boasts unless we explain how we will actively create this value
for Elk River. Our plan to serve Elk River has four basic elements.
1. Make every bond issue successful.
Planning is the key to every bond issue. Planning ensures that the issue produces
the funds you require and the debt matches the available revenues. Planning tests
various debt options to find the one that works best for Elk River. You know the
financial commitments needed to support the debt and those commitments do not
change over time. Since the vast majority of City debt is backed by a general
obligation pledge, Elk River taxpayers rely on the validity of the planning that goes
into every issue. The experience of Elk River School District illustrates the
importance of getting it right at the beginning.
Marketability is another important ingredient of success. The theory of competitive
bond sales is simple. The greater the number of bidders, the greater the likelihood
of lower interest costs for the City. With the consolidation of investment banking
firms, the total universe of bidders continues to shrink. Ehlers' strives to attract as
many as possible to every sale. With this region's only Internet bidding site and the
electronic distribution of sale information, we make bidding on Elk River bonds
easier than ever before.
LEADERS IN PUBLIC FINANCE
3060 Centre Pointe Drive, Roseville, MN 55113-1105
Equal Opportunity Employer
Charter Member of the National Association
of Independent Public Finance Advisors
651.697.8500 tax 651.697.8555 www.ehlers-inc.com
City of Elk River
August 3, 2000
Page 2
Ehlers works to make Elk River issues attractive to investors, while balancing the
needs of the City. The key provisions of each issue (call, discount, structure)
receive careful consideration. Each of these items has direct economic implications
for the City. We are constantly discussing these matters with the public finance
community to ensure that we stay current with a changing marketplace.
Manage debt effectively
Ehlers has proven that effective debt management brings significant economic
benefits to the issuer. We will work with City Staff to:
Structure each issue to maximize future options without compromising initial
rates.
Refund outstanding bonds not at first opportunity, but at best opportunity.
Find opportunities to free monies through call or defeasance.
Forecast future cash flows to prevent unwanted demands on other resources.
Minimize debt issuance, avoiding thousands of dollars in issuance expense.
Ehlers recent experience in Champlin demonstrates the tangible benefits. In 1999,
Ehlers completed a financial management planning process for Champlin. One
element of the process analyzed all of the City's outstanding debt. We identified
three bond issues that could be defeased or prepaid. This step created several very
positive outcomes:
The outstanding debt of the City was reduced by $1,325,000.
Over $360,000 in excess fund balance and $700,000 in future assessment
revenues were freed for other purposes.
These monies were used to help create ongoing funding programs for street
reconstruction, storm sewers, street lighting and equipment.
This money also helped the City shift tax levies to better position itself for
the potential reinstatement of levy limits.
Meet development needs
As Minnesota's leading economic development advisor, Ehlers understands the
financial implications for cities. By helping Elk River meet development needs,
Ehlers adds value through the redevelopment of underutilized areas, meeting
complete range of local housing needs, creation of new jobs, and expansion of the
tax base.
City of Elk River
August 3, 2000
Page 3
As your financial advisor, Ehlers will help the City by:
Making effective use of development finance tools - minimize local funding
needed, minimize risk position of city.
Bringing Elk River the lessons learned in other cities - ideas that have worked
well and pitfalls to avoid.
Making all aspects of tax increment financing work - from the creation of
new districts to the management of existing districts to the simplifications of
annual reporting (TIF and business subsidies). An important value added in
this area is minimizing future State Auditor compliance costs through good
planning and data management.
4. Plan for the Future
Only part of our Value comes from creating effective solutions for current projects.
Ehlers has proven that cities receive significant value from planning for the future.
Planning helps Elk River:
Provide funding for capital improvements without debt - avoiding costs of
issuance and interest.
Manage changes in property taxes by anticipating future revenue needs and
changes in tax base.
Make effective use of non-tax revenues.
Create long-term funding strategies for services and capital investment.
Ail of these things help you serve the community while making best use of your financial
resources. This approach and services are what sets Ehlers apart from all other firms. This
value is why Ehlers should be your financial advisor.
Thank you for the opportunity to explain why Ehlers & Associates wants to be financial
advisor to the City of Elk River. It would be a privilege to serve Elk River and help you
face the challenges that lie ahead.
Best wishes,
cc: Pat Klaers and Lori Johnson
Sid Inman
WORK BEING CONDUCTED IN R-O-W
With a valid permit (Street Disruption)
8/4/00
Job # Location
02MB795
02MA809
02MD885
02MA805
02MD067
02MA804
02MD634
02MK220
02MK096
02MH877
02MH310
02MB307
02MB307
02MK817
02MK713
02MK794
02MM105
02MM 185
02MM 184
02MN124
02MN489
MGC363
MGC445
MGC531
A5620-00
MGC# 1143
MGC# 1189
A5814
US WEST
4th & Jackson, Gates between 3rd & 4th, Main St. between Freeport & 169-
paid
Tyler St. starting at Co. Rd. 13 & ending at 201st Ave. - paid
Evans St. & North of 193rd Ave. on east side - paid
CSAH 12 from Highway 169 east to County line - paid
Rear of 804 Freeport (Snyder Drug) - paid
On Tyler from 171st Ave north to CSAH 13 -paid
Main St. 1220 feet south on Zane St.- paid
North side of Freeport St., TCF, & south side of Norwest Bank going to
the west approximately 100 feet
Yankton St. from Highway 10
Alley between 716 Main St. & 305, 313, & 315 Jackson Ave.
Albany & 188th Ave.
18554 Queen St. - Communicor acting as agent for US West
North side of School St. west to east and from NE comer of School St. &
Freeport Ave. south 670 ft. on the east side of the clinic
(additional permit) School Street 753 feet east of Jackson Ave.
19602 Evans St.
Elk River Industrial park
Tyler St. Trott Brook Farms
Windsor Park
179th Ave. & Tyler St.
Zane & Co. Rd. 12 (WalMart)
The Woods of Hillside
Tyler St. & 179th Ave.
MINNEGASCO
Windsor Park
Main St. and Norfolk Ave.
Lafayette Woods
CSAH 12 from intersection with CSAH 13 east to county line
Twin Lakes Townhomes
Elk River Business Park - Tyler St. & Industrial Circle
CSAH #1 & 207th Ave.
CONNEXUS
211 '11 Fresno St. - Windsor Woods
11264 202 Ave. - Deerfield 1st
20328 Smith St. - Lot 6, Block 1, K_nollwood Addition
Whitetail Ridge
11090 177 Ave./17286 Ulysses St.
NORTH STAR ACCESS (CONTRACTOR-CCI)
Numerous location throughout the city
Riverplace and SE portion of Elk River