8.9. SR 12-07-2015
Request for Action
To Item Number
Mayor and City Council 8.9
Agenda Section Meeting Date Prepared by
General BusinessDecember 7, 2015Tim Simon, Finance Director
Item Description Reviewed by
Redemption of the General Obligation Capital Cal Portner, City Administrator
Improvement Plan Bonds, Series 2006C
Reviewed by
Action Requested
Adopt, by motion, a resolution providing for the redemption of certain outstanding General Obligation
Capital Improvement Plan Bonds, Series 2006C of the city.
Background/Discussion
On November 20, 2006, the City Council authorized the issuance of $3,220,000 General Obligation
Capital Improvement Plan Bonds for the construction of the Library. The bonds have a final maturity of
February 1, 2027, and the true interest cost is 4.0355 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 February 1, 2016.
The bonds have a call date of 02/01/2016 and will prepay the bonds maturing in 2017-2027 (principal
only).
During the past several years during the Capital Improvement Plan (CIP) process we have discussed the
opportunity to redeem and prepay these bonds early in 2016.
Financial Impact
The amount needed to prepay the 2017-2027 bonds will be $2,110,000 (principal) plus any accrued
interest. The funding will come from the Government Building Fund which has been the funding source
since 2006. The city will save $541,000 in interest expense over the next 10 years plus annual bond
administrative fees.
Attachments
Resolution providing for the redemption of certain outstanding General Obligation Capital
Improvement Plan Bonds, Series 2006C of the city
Sources and Uses summary
Total Redeemed Debt Service schedule
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, December 7,
2015, 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. 15-_____
RESOLUTION PROVIDING FOR THE REDEMPTION OF CERTAIN OUTSTANDING
GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2006C 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 Capital Improvement Plan Bonds, Series
2006C, dated December 14, 2006 (the “Bonds”), in the original aggregate principal amount of
$3,220,000. The Bonds maturing on February 1 in the years 2017 through and including 2027, in the
aggregate principal amount of $2,110,000 (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 February 1, 2016, or such later date for which proper
notice of call may be given, and such bonds are hereby called for redemption on such date.
470919v1 JSB EL185-13
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.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
2
470919v1 JSB EL185-13
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, December 7, 2015, 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 General Obligation Capital
Improvement Plan Bonds, Series 2006C of the City.
th
WITNESS My hand as City Clerk this 7 day of December, 2015.
City Clerk
City of Elk River, Minnesota
470919v1 JSB EL185-13
EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2006C
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
February 1, 2016
all outstanding bonds of the City designated as General Obligation Capital Improvement Plan
Bonds, Series 2006C, dated December 14, 2006, having stated maturity dates of February 1 in the
years 2017 through 2027, both inclusive, totaling $2,110,000 in principal amount:
Year of Maturity Amount CUSIP
2018 $315,000 287407 M98
2020 345,000 287407 N30
2022 370,000 287407 N55
2024 405,000 287407 N71
2027 675,000 287407 P20
The bonds are being called at a price of par plus accrued interest to February 1, 2016, 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 February 1, 2016.
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 rd 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: December 7, 2015.
BY ORDER OF THE CITY COUNCIL
A-1
470919v1 JSB EL185-13
FINAL
City of Elk River, Minnesota
Redemption of Series 2006C
Sources & Uses
Redemption Date: 02/01/2016
Sources Of Funds
City Funds.....................................................................................................................................................................................$2,111,100.00
Total Sources...........................................................................................................................................................................................$2,111,100.00
Uses Of Funds
Deposit to Redemption Fund.......................................................................................................................................................................2,110,000.00
Costs of Redemption.......................................................................................................................................................................................1,100.00
Total Uses..............................................................................................................................................................................................$2,111,100.00
2016 Call 2006C - FINAL | SINGLE PURPOSE | 11/10/2015 | 9:19 AM
FINAL
$3,220,000
City of Elk River, Minnesota
General Obligation Capital Improvement Bonds, Series 2006C
Total Redeemed Debt Service
Date Principal Coupon Interest Total P+I
02/01/2017 155,000.00 3.800%83,405.00 238,405.00
02/01/2018 160,000.00 3.800%77,515.00 237,515.00
02/01/2019 170,000.00 3.850%71,435.00 241,435.00
02/01/2020 175,000.00 3.850%64,890.00 239,890.00
02/01/2021 180,000.00 3.950%58,152.50 238,152.50
02/01/2022 190,000.00 3.950%51,042.50 241,042.50
02/01/2023 200,000.00 4.000%43,537.50 243,537.50
02/01/2024 205,000.00 4.000%35,537.50 240,537.50
02/01/2025 215,000.00 4.050%27,337.50 242,337.50
02/01/2026 225,000.00 4.050%18,630.00 243,630.00
02/01/2027 235,000.00 4.050%9,517.50 244,517.50
Total $2,110,000.00 - $541,000.00 $2,651,000.00
Yield Statistics
Base date for Avg. Life & Avg. Coupon Calculation.......................................................................................................................................................2/01/2016
Average Life............................................................................................................................................................................................6.415 Years
Average Coupon..........................................................................................................................................................................................3.9970447%
Weighted Average Maturity (Par Basis)...................................................................................................................................................................6.415 Years
2006C GO Cap Imp Bonds - | SINGLE PURPOSE | 11/10/2015 | 9:19 AM