5.5. SR 11-06-2006
City of Elk River
REQUEST FOR COUNCIL ACTION
Agenda Section Meeting Date
Administration November 6, 2006
Item Description
Resolution Providing for the Sale of $3,220,000 General
Obli ation Ca ital 1m rovement Plan Bonds, Series 2006C
Item Number
5.5.
Prepared by
Lori ohnson, Ci Administrator
Reviewed by
Introduction
A public hearing has been held on the city's Capital Improvement Plan related to construction of a new
library and bids have been awarded for this project. The City Council is now asked to consider a
resolution providing for the sale of $3,220,000 General Obligation Capital Improvement Plan Bonds,
Series 2006C to [mance a portion of the construction of the library.
Discussion
At the March 13, 2006, worksession, the City Council agreed that approximately $1,500,000 from a
combination of library, government building reserve, and capital outlay funds would be used to pay for
the construction of the new library with the balance being funded through capital improvement plan
bonds. The attached resolution authorizes the sale of those bonds. The resolution includes a provision
that the debt service levy may be reduced annually by any amount available in reserve funds allocated for
the payment of the debt. At that March 13 worksession, the City Council also agreed to dedicate part of
the government buildings reserve funds to the payment of bonds. The debt service levy reduction will be
made on an annual basis at the time the tax levy is approved.
Financial Impact
Issue bonds with proceeds of approximately $3,150,000 for construction of the library with debt service
funded by annual tax levy and transfers from reserve funds.
Attachments
· Pres ale report
· Resolution Providing for the Sale of $3,220,000 General Obligation Capital Improvement Plan
Bonds, Series 2006C
Action Requested
Adopt the resolution providing for the sale of $3,220,000 General Obligation Capital Improvement Plan
Bonds, Series 2006C.
Council Action Motion by _ Second by _ Vote
Follow Up
S:\Council\Lori\2006\Bond Sale Library 110606.doc
CITY OF ELK RIVER, MINNESOTA
PRE-SALE REPORT
NOVEMBER 6, 2006
Proposed Issues: $3,220,000 General Obligation Capital Improvement Plan Bonds Series
2006C
Purpose: The bond issue will fund a portion of a new library facility for the
community with proceeds of approximately $3.147 million. Additional
funding of over $1 million will pay for the remaining cost of the facility, to
be constructed in 2007.
Description: The City presented a modification to its capital improvement plan for the
library project and conducted a public hearing in August, 2006, after
published notice. No petition was received within 30 days of the hearing
which requested the Council put the bond issue to a vote of the public.
Therefore, these are general obligation bonds issued pursuant to Minnesota
Statues, Chapter 475.521.
Term/Call Feature: Principal on the 2006C Bonds will be due on February 1 in the years 2008
through 2027. Principal 2006C Bonds maturing February 1, 2017, and
thereafter will be subject to prepayment at the discretion of the City on
February 1,2016.
Funding Sources: The Bonds are general obligations of the City and as such are secured by a
pledge of the City's full faith, credit, and taxing powers. The City will
pledge property taxes to the 2006C Bonds but can and expects to use other
available revenues to write down the property tax levy on an annual basis.
Discussion Issues: These bonds will be bank qualified since the City will be issuing less than
$10 million in bonds this year.
The 2006C Bonds will be within the City's total debt limit for tax-supported
debt of 2% of market value. The City currently has available debt limit of
.
Prepared by Ehlers & Associates, Inc.
over $18,000,000 after issuance of 2006C debt.
The first interest payment on the Bonds will be August 1, 2007 and
semiannually thereafter on February 1 and August 1. The projected debt
service and flow of funds are attached to this report.
Schedule:
Pre-Sale Review:
Distribute Official Statement:
November 6, 2006
November 10,2006
Week of Nov. 13,2006
November 20,2006
Early December, 2006
Conference with Rating Agency:
Bond Sale:
Estimated Closing Date:
Attachments:
Sources and Uses of Funds
Proposed Debt Service Schedule
Resolution authorizing Ehlers to proceed with bond sale
Ehlers Contacts:
Financial Advisors:
Mark Ruff (651) 697-8505
Sid Inman (651) 697-8507
Diana Lockard (651) 697-8534
Debbie Holmes (651) 697-8536
Connie Kuck (651) 697-8527
Bond Analysts:
Bond Sale Coordinator:
The Official Statement for this financing will be mailed to the Council Members at their home
address for review prior to the sale date.
.
Prepared by Ehlers & Associates, Inc.
2
Resolution No.
Council Member
introduced the following resolution and moved its adoption:
Resolution Providing for the Sale of
$3,220,000 General Obligation Capital Improvement Plan Bonds, Series 2006C
A. WHEREAS, the City Council of the City of Elk River, Minnesota, has heretofore determined
that it is necessary and expedient to issue the City's $3,220,000 General Obligation Capital
Improvement Plan Bonds, Series 2006C (the "Bonds"), to finance the construction of a library in
the City;
B. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"),
as its independent financial advisor for the Bonds and is therefore authorized to solicit proposals
in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9);
NOW, THEREFORE, BE IT RESOLVED by the City Council ofthe City of Elk River, Minnesota:
1. Authorization: Findings. The City Council hereby authorizes Ehlers to solicit proposals for the
sale of the Bonds.
2. Meeting: Proposal Opening. The City Council shall meet at 6:30 P.M. on November 20,2006,
for the purpose of considering sealed proposals for and awarding the sale of the Bonds.
3. Official Statement. In connection with said sale, the officers or employees ofthe City are hereby
authorized to cooperate with Ehlers and participate in the preparation of an official statement for
the Bonds and to execute and deliver it on behalf of the City upon its completion.
The motion for the adoption of the foregoing resolution was duly seconded by Council Member
and, after full discussion thereof and upon a vote being taken thereon,
the following Council Members voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
Dated this _ day of
,2006.
City Clerk
City of Elk River, MN
$3,220,000 G.o. Library Bonds, Series 2007
Sources & Uses
Dated 12/01/2006 I Delivered 12/01/2006
Sources Of Funds
Par Amount of Bonds... ............................... ............................ ............................................................................ ...........................................
Total Sources...........................................................................................................................................................................................
Uses Of Funds
Total Underwriter's Discount (1.250%) ................................. .......................................................................... ....................................................
Costs of Issuance.................................................................................................................................................................. .....................
Deposit to Project Construction Fund....................................................................................................................................................................
Rounding Amount........ .................................. ................ ..................... ........................................... ............................................ ...................
Total Uses..............................................................................................................................................................................................
Ser 06 $3.375K GO CIF L1b / .\7NGLE FURFOSE / 1//1/2006 / 7:53 FM
$3,220,000.00
$3,220,000.00
40,250.00
32,000.00
3,147,000.00
750.00
$3,220,000.00
Ehlers & Associates, Inc.
Leaders in Public Finance
Page 1
City of Elk River, MN
$3,220,000 G.o. LIbrary Bonds, Series 2007
Debt Service Schedule
Date Principal Couron Interest Total P+ I Fiscal Total
12101/2006
08/0112007 92,285.00 92,285.00
0210112008 85,000.00 3.850% 69,213.75 154,213.75 246,498.75
08/0112008 67,577.50 67,577.50
0210112009 110,000.00 3.900% 67,577.50 177,577.50 245,155.00
08/0112009 65,432.50 65,432.50
02/0112010 115,000.00 3.950% 65,432.50 180,432.50 245,865.00
08/01/2010 63,161.25 63,161.25
02/01/2011 120,000.00 4.000% 63,161.25 183,161.25 246,322.50
08/0112011 60,761.25 60,761.25
02/01/2012 125,000.00 4.050% 60,761.25 185,761.25 246,522.50
08/0112012 58,230.00 58,230.00
02/01/2013 130,000.00 4.100% 58,230.00 188,230.00 246,460.00
08/0112013 55,565.00 55,565.00
0210112014 135,000.00 4.150% 55,565.00 190,565.00 246,130.00
08/0112014 52,763.75 52,763.75
0210112015 140,000.00 4.200% 52,763.75 192,763.75 245,527.50
08/01/2015 49,823.75 49,823.75
02/0112016 150,000.00 4.200% 49,823.75 199,823.75 249,647.50
08/0112016 46,673.75 46,673.75
0210112017 155,000.00 4.300% 46,673.75 201,673.75 248,347.50
08/0112017 43,341.25 43,341.25
02/0112018 160,000.00 4.300% 43,341.25 203,341.25 246,682.50
08/01/2018 39,901.25 39,901.25
02/01/2019 170,000.00 4.350% 39,901.25 209,901.25 249,802.50
08/0112019 36,203.75 36,203.75
02/0112020 175,000.00 4.350% 36,203.75 211,203.75 247,407.50
08/0112020 32,397.50 32,397.50
02/0112021 180,000.00 4.400% 32,397.50 212,397.50 244,795.00
08/0112021 28,437.50 28,437.50
02101/2022 190,000.00 4.400% 28,437.50 218,437.50 246,875.00
08/01/2022 24,257.50 24,257.50
0210112023 200,000.00 4.450% 24,257.50 224,257.50 248,515.00
08/0112023 19,807.50 19,807.50
02/0112024 205,000.00 4.450% 19,807.50 224,807.50 244,615.00
08/0112024 15,246.25 15,246.25
02/01/2025 215,000.00 4.500% 15,246.25 230,246.25 245,492.50
08/01/2025 10,408.75 10,408.75
02101/2026 225,000.00 4.500% 10,408.75 235,408.75 245,817.50
08/01/2026 5,346.25 5,346.25
0210112027 235,000.00 4.550% 5,346.25 240,346.25 245,692.50
Total $3,220,000.00 $1,712,171.25 $4,932,171.25
Yield Statistics
Bond Year Dollars.. .............. ......... .... .......... .... ......... .......... ............. .... ........ .... ... ...................... ............ .... ..... .... ............ ....... ........ .... ...... .....
Average Life............................................................. ...............................................................................................................................
Average Coupon............................................................. .............................................................................................................................
$39,011.67
12.115 Years
4.3888698%
Net Interest Cost (NIC) .......... .... ...... ....... ...... .... .... .... ........... ........ .... ............... ............. .... ........ .............. .... ... .......... ...... ......... ...... ...... ...... .....
True Interest Cost (TIC). ...... ........ ... .................. ........... ................. .... ........ ........... .... .... .... .......... .... ........ .... ......... ...... ...... ......... .......... ...... ....,
Bond Yield for Arbitrage Purposes... ....... .... .......... ........... .... .... .... .... ... .... ............ .... ..... .... .... ...... .... ..... .......... ...... ........... .... ............ ... ...... .............
All Inclusive Cost (AI C)... .... .... ..... .... .... ............. ........ .... .... ........ .... ..... .... ....... ........ .... .... .............. .... .... .... ......... ...... .... ......... ...... ...... ...... .......
4.4920440%
4.5156889%
4.3746227%
4.6296972%
IRS Form &03&
NetlnterestCost.......................................................................................................................................................................................
Weighted Average Maturity.......... .... .... ..... .... .... .... .... .... ....... .... .......... .... ... ................ .... ... ...... .... ........ ....... ...... .... ...... ...... .... ........... ...... .... .........
4.3888698%
12.115 Years
Ser06.';'3.375KGOC/PLIb / SINGLEPUKPOSE /1//1/2006/ 7:53PM
Ehlers & Associates, Inc.
Leaders in Public Finance
Page 2
RESOLUTION NO. 06-_
A RESOLUTION FOR THE CITY OF ELK RIVER
Council Member
introduced the following resolution and moved its adoption:
RESOLUTION PROVIDING FOR THE SALE OF $3,220,000 GENERAL
OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2006C
A. WHEREAS, the City Council of the City of Elk River, Minnesota, has heretofore
determined that it is necessary and expedient to issue the City's $3,220,000 General
Obligation Capital Improvement Plan Bonds, Series 2006C (the "Bonds"), to finance the
construction of a library in the City;
B. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota
("Ehlers"), as its independent fInancial advisor for the Bonds and is therefore authorized to
solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9);
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,
Minnesota:
1. Authorization: Findings. The City Council hereby authorizes Ehlers to solicit proposals for
the sale of the Bonds.
2. Meeting: Proposal Opening. The City Council shall meet at 6:30 P.M. on November 20,
2006, for the purpose of considering sealed proposals for and awarding the sale of the
Bonds.
3. Official Statement. In connection with said sale, the offIcers or employees of the City are
hereby authorized to cooperate with Ehlers and participate in the preparation of an official
statement for the Bonds and to execute and deliver it on behalf of the City upon its
completion.
The motion for the adoption of the foregoing resolution was duly seconded by Council Member
and, after full discussion thereof and upon a vote being taken
thereon, the following Council Members voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
Dated this 6th day of November, 2006.
ATTEST
Stephanie Klinzing, Mayor
Joan Schmidt, City Clerk