Agenda - Council - 03/13/1991 - Laserfiche WebLink

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! I I I I CAS # CITY OF RAMSEY'S STATE AID BONDING By: Sandra Ashley Helling, Finance Officer Background: On September 11, 1990, the City of Ramsey entered into a contract with Dresel Contracting, Inc. for h'nprovement Project #89-4. This is the 153rd Avenue N.W. Project and is assigned an S.A.P. Number of 199-107-04. At the August 28, 1990 council meeting, Mr. Raatikka stated "... this project will be paid for through state aid funds and based on allocations through next year, City staff is proposing that the City bond for approximately $500,000 for state aid projects." Attached hereto is a copy of a "Report of State Aid Contract" which was filed with the Minnesota Department of Transportation on November 15, 1990. It should be noted this report states the City of Ramsey will be bonding for $500,000 on this project. I I I I I I ,I I Also attached is a letter from Mr. Raatikka to the City dated November 14, 1990 and an enclosure which details the current and future allocation requirement of MSAS funds. Basically, the 153rd Avenue N.W. Project will require the full 1991 MSA Construction Fund allotment and approximately 60% of the 1992 allotment - excluding interest thereon.. Last fall our City Administrator planned to sell bonds for this MSAS project along with several smaller (non-MSAS) projects. As this MSAS project could not be combined with the other projects for the purpose of bonding, the City intended to go to market with two bonds at $500,000 each. Due to the high cost of issuance for these bonds, it was decided to facilitate the MSAS bond through a loan from the Landfill Expendable Trust Fund and combine the other projects with a furore issue. While the State was notified of the City's intent via the "Report of State Aid Contract", the loan was not finalized and the State of Minnesota is awaiting the resolution confirming the date of bond sale. Observations: Our City Attorney will prepare the actual bonds; these bonds will be callable by the City to enable refunding at some furore date should the City so desire. The bonds may be refunded for cash flow purposes or to establish as a general obligation for the City. As the bond schedule establishes pay- back over a five year period, the City will have some flexibility in decision making.. The loan from the Landfill Trust Fund to facilitate the bonds will be interest bearing at 7.2% for 1991-1992, 7.25% for 1993-1994 and 7.3% for 1995. Recommendation: Staff recommends that City Council adopt the attached resolution for the sale of the bond for the purpose of establishing, relocating, constructing, reconstructing or improving its State-Aid Highways or Streets in accordance with law. I I Council Action: Motion to adopt/not adopt Resolution 91-03-__ To Commissioner of Transportation Requesting a Bond Record. Review Checklist: I :1 Finance Officer City Attorney City Engineer CC: 3/13/91