6.1. SR 03-08-1993
ITEM 6. 1.
TO:
MAYOR AND CITY COUNCIL
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FROM:
LORI JOHNSON, FINANCE DIRECTOR
DATE: MARCH 5, 1993
SUBJECT: RESOLUTION INITIATING THE PROCESS
FOR THE SALE OF THE CITY'S GENERAL
OBLIGATION REFUNDING BOND SERIES
1993A
In 1985, the City issued two General Obligation Tax Increment
Financing Bonds. The first issue in the amount of $850,000 was
for the water tower project, TIF Districts No. 1 and No.3.
The second issue in the amount of $130,000 was for the Guardian
Angels project, TIF District No.2. Because of the favorable
interest rates, the City is now in a position to advance refund
these two bond issues. The net interest cost on the 1985
issues is 8.571 percent and the net interest cost on the new
issue is estimated at 4.260 percent. The refunding should
result in an interest savings of approximately $24,000.
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Attached is a copy of the Resolution Initiating the Process for
the Sale of the City's General Obligation Refunding Bond Series
1993A. The second attachment is a copy of the Recommendations
for this bond from Springsted, Incorporated. The
Recommendations give additional details regarding bond issue.
The new issue will be in the amount of $510,000. The sale date
is set for AprilS. The refunding issue will continue to be
paid from Tax Increment generated by TIF Districts No.1, No.
2, and No.3. Although the bond issues will now become one
issue, there will be two separate maturity schedules so that
increments from TIF No. 1 and TIF No. 3 will be applied to the
portion of the new issue that is for the water tower and
increments from TIF No. 2 will be applied to the portion of the
new issue that is for ~he Guardian Angels project.
Staff recommends adopt!ng the attached resolution which will
authorize the sale of $510,000 General Obligation Refunding
Bonds.
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720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
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EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF
ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly called and held at the Elk River City Hall on
March 8, 1993, beginning at o'clock P.M., C.T.
The following members of the Council were present:
and the following were absent:
Councilmember
following resolution and moved its adoption:
introduced
the
RESOLUTION NO.
RESOLUTION INITIATING THE PROCESS FOR THE
SALE OF THE CITY'S
GENERAL OBLIGATION REFUNDING
BONDS, SERIES 1993A
BE IT RESOLVED by the City Council (the "Council") of the
City of Elk River, Minnesota (the "City"), as follows:
1.
following:
The Council hereby finds and determines the
(a) The Council believes it to be in the
City's best interest to consider a refunding of the
callable bonds of (i) the City's General Obligation
Tax Increment Bonds, Series 1985A, dated September
1, 1985, issued in the original principal amount of
$850,000 (the "1985A Bonds"), and (ii) the City's
General Obligation Tax Increment Bonds, Series
1985B, dated September 1, 1985, issued in the
original principal amount of $130,000 (the "1985B
Bonds").
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(b) The 1985A Bonds which mature after
February 1, 1994, are in the aggregate principal
amount of $415,000 and are subject to prepayment on
said date at the option of the City at the
redemption price of par plus accrued interest.
(c) The 1985B Bonds which mature after
February 1, 1994, are in the aggregate principal
amount of $65,000 and are subject to prepayment on
said date at the option of the City at the
redemption price of par plus accrued interest.
(d) The refunding of the callable 1985A Bonds
and 1985B Bonds is consistent with covenants made
with the holders thereof and is necessary and
desirable for and will result in the reduction of
debt service cost to the City.
(e) It is necessary and expedient to issue the
City's General Obligation Refunding Bonds, Series
1993A (the "Bonds"), to provide moneys for a
refunding of the callable 1985A Bonds and 1985B
Bonds. The necessary principal amount of the Bonds
is currently estimated to be $510,000, but in
offering the Bonds for sale, the City will reserve
the right to increase or decrease the amount of the
Bonds by not more than $25,000, and accordingly the
maximum principal amount of the Bonds would be
$535,000.
(f) The city has retained springsted
Incorporated, in saint Paul, Minnesota as its
independent financial advisor for the Bonds and is
therefore authorized to sell the Bonds by a
competitive negotiated sale in accordance with
Minnesota Statutes, Section 475.60, Subdivision
2(9) .
(g) It is necessary and desirable to the sound
financial management of the affairs of the City that
the City issue the Bonds pursuant to Minnesota
Statutes, section 475.67, Subdivision 13, in order
to provide financing for the refundings described
above, and the Council hereby states its intention
to authorize and issue the Bonds accordingly.
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2. The terms and conditions of the Bonds and the sale
thereof are set forth in the "Terms of Proposal" attached hereto
as Exhibit A, and the Council shall meet at the time and place
specified therein for the purposes of considering sealed bids
for the purchase of the Bonds and of considering the award of
sale of the Bonds.
Adopted by the City Council of the city of Elk River,
Minnesota, this 8th day of March, 1993.
The motion for the adoption of the foregoing resolution was
duly seconded by Councilmember and upon a vote
being taken thereon, the following Councilmembers voted in favor
thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted.
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