3.7. EDSR 04-13-2009REQUEST FOR ACTION
To Item Number
Economic Develo ment Authori 3.7
Agenda Section Meeting Date Prepared by
Consent Aril 13, 2009 Tim Simon, Finance Director
Item Description Reviewed by
Resolution Authorizing The Redemption Of Certain
Outstanding City Hall And Law Enforcement Facility Revenue Reviewed by
Refunding Bonds (City Of Elk River Lease Purchase Obligation)
Series 1997
Action Requested
The approval of Resolution Authorizing The Redemption Of Certain Outstanding City Hall And Law
Enforcement Facility Revenue Refunding Bonds (City Of Elk River Lease Purchase Obligation) Series
1997
Background/Discussion
After every tax settlement and bond payment the Finance Department reviews the various debt service
funds and outstanding bond issues to determine if sufficient cash exists to pay-off any outstanding bonds
assuming they have reached their callable date.
On November 1, 1991, the City and EDA issued $2,740,000 in City Hall and Law Enforcement Facility
Revenue Bonds. Subsequently on December 1, 1997, the City and EDA refunded the bonds with a final
maturity of February 1, 2011. The bonds have been financed internally thru the NSP fund, Government
Buildings Fund, General Fund, and Liquor Store Fund. Sufficient funds exist with the remaining
amounts internally financed and the irrevocable deposit with the escrow agent ($234,155 as of 12/31 /08)
to call the remaining outstanding principal plus accrued interest to June 1, 2009. The deposit with the
escrow agent (US Bank) will be released and applied against the final payment.
On April 6, 2009, the Ciry Council passed a Resolution Requesting Action Of The Board Of
Commissioners Of The Elk River Economic Development Authority, Minnesota Calling For
Redemption Of Certain Outstanding Bonds.
The blank lines on section E. will be filled in once we get closer to the June 1, 2009 call date as final
calculations and amounts will be determined with US bank.
Financial Impact
Prepaying the bonds would result in a savings of approximately $27,000 less a small amount of accrued
interest. The amount to be paid on June 1, 2009 is $410,000 outstanding principal plus accrued interest.
S: \Council\Tim\2009 \EDAcalling1997bonds.doc
Attachments
• Resolution Authorizing The Redemption Of Certain Outstanding City Hall And Law
Enforcement Facility Revenue Refunding Bonds (City of Elk River Lease Purchase Obligation)
Series 1997
ACtIOn Motion by Second by Vote
Follow Up
S: \Council\Tim\2009 \EDAcalling1997bonds.doc
EXTRACT OF MINUTES OF A MEETING OF THE BOARD OF COMMISSIONERS
OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE
CITY OF ELK RIVER, MINNESOTA
HELD: April 13, 2009
Pursuant to due call and notice thereof, a regular or special meeting of the Board of
Commissioners of the Economic Development Authority of the City of Elk River, Sherburne
County, Minnesota, was duly held at City Hall on April 13, 2009, at _:00 o'clock p.m. for the
purpose, in part, of authorizing the redemption of certain outstanding City Hall and Law
Enforcement Facility Revenue Refunding Bonds (City of Elk River Lease Purchase Obligations),
Series 1997.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
RESOLUTION NO.
RESOLUTION AUTHORIZING THE REDEMPTION OF CERTAIN OUTSTANDING
CITY HALL AND LAW ENFORCEMENT FACILITY REVENUE REFUNDING BONDS
(CITY OF ELK RIVER LEASE PURCHASE OBLIGATION) SERIES 1997
A. WHEREAS, the Board of Commissioners of the Economic Development
Authority of the City of Elk River (the "Authority") has issued $2,290,000 City Hall and Law
Enforcement Facility Revenue Refunding Bonds (City of Elk River Lease Purchase Obligation),
Series 1997, dated December 1, 1997, (the "Bonds") which were used to advance refund the
entire principal outstanding of the Authority's $2,290,000 City Hall and Law Enforcement
Facility Revenue Bonds, Series 1991, dated November 1, 1991; and
B. WHEREAS, the Bonds are payable from lease rental payments pursuant to a
Lease Purchase Agreement, dated November 1, 1991, and a Supplement to the Lease Purchase
Agreement, dated December 1, 1997, between the City and the Authority; and
C. WHEREAS, in connection with the issuance of the Bonds the Authority has
established a Bond Fund pursuant to the Trust Indenture dated as of November 9, 1991, as
amended by the Supplement to Trust Indenture dated as of December 1, 1997 (collectively, the
"Indenture"), which Fund contained a "Debt Service Account"; and
D. WHEREAS, to the Debt Service Account the Authority has been crediting the
rent payments received from the City of Elk River; and
E. WHEREAS, as of April 13, 2009, the cash balance in the Debt Service Account
was $ and the City anticipates an additional $ to be deposited
in the Debt Service Account by June 1, 2009 (the "Call Date"). The remaining outstanding
balance of principal and interest due on the Bonds as of the Call Date is $ ,
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consequently, the balance in the Debt Service Account will be not less than the remaining
outstanding principal and interest requirements of the Bonds on the Call Date; and
F. WHEREAS, the Bonds maturing on February 1, 2010 and 2011, aggregating
$410,000 in principal amount are subject to redemption on June 1, 2009, and on any date
thereafter, at a price of par plus accrued interest.
NOW, THEREFORE, be it resolved by the Economic Development Authority of the City
of Elk River, Minnesota, as follows:
1. The Economic Development Authority hereby determines that there exists
sufficient money in the Debt Service Account to prepay on the Call Date, $410,000 aggregate
principal amount of Bonds maturing on February 1, 2010 and 2011.
2. U.S. Bank National Association, in St. Paul, Minnesota, the bank at which
principal and interest on the Bonds is payable, is hereby authorized and directed to cause the
Notice of Redemption, substantially in the form attached hereto as Exhibit A, to be given to
bondholders in accordance with the provisions of the Resolution and the Indenture.
3. No further action shall be required of the Authority to complete prepayment of the
Bonds and the President and Executive Director are authorized and directed to take such
additional action on behalf of the Authority as is necessary to complete the prepayment of the
Bonds.
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 the same:
Whereupon the resolution was declared duly passed and adopted.
Adopted on April 13, 2009.
Attest:
Executive Director
Approved:
President
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EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
CITY HALL AND LAW ENFORCEMENT LEASE REVENUE REFUNDING BONDS
(CITY OF ELK RIVER LEASE PURCHASE OBLIGATION) SERIES 1997
NOTICE IS HEREBY GIVEN that by order of the Economic Development Authority of the City
of Elk River, Minnesota, there have been called for redemption and prepayment on
June 1, 2009
the following outstanding bonds of the Economic Development Authority of the City of Elk
River designated as Lease Revenue Bonds, Series 1997, dated December 1, 1997:
February 1
Maturity Dates
2010
2011
Principal Amount
$280,000
$130,000
Interest Rate
5.00%
5.00%
('T JSTP Nn.
287420 BD4
287420 BE2
The bonds are being called at a price of par plus accrued interest to June 1, 2009, 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 U.S. Bank National Association, Attention:
Paying Agent Services, 60 Livingston Avenue, St. Paul, Minnesota 55107.
Dated: April 13, 2009. BY ORDER OF THE ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY
OF ELK RIVER, MINNESOTA
/s/ .Executive Director
*The Authority shall not be responsible for the selection of or use of the CUSIP numbers, nor is
any representation made as to their correctness indicated in the notice. They are included solely
for the convenience of the holders.
2320493v1 A-1