Agenda - Council - 12/17/1991 - Laserfiche WebLink

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SPRINGSTED 16655 West Bluemound Road Suite 290 Brooklield, WI 53005-5935 (414) 782-8222 Fax: (414) 782-2904 2739 Second Avenue S.E. Cedar Rapids, IA 52403-1434 (319) 363-2221 Fax: (319) 363-6999 85 East Seventh Place Suite 100 Saint Paul, MN 55101-2143 (612) 223-3000 Fax: (612) 223-3002 6800 College Boulevard Suite 600 Overland Park, KS 66211-1533 (913) 345-8062 Fax: (913) 345-1770 222 South Ninth Street Suite 2825 Minneapolis, MN 55402-3368 (612) 333-9177 Fax: (612) 333-2363 December 12, 1991 Mayor Jim Gilbertson Members, City Council Mr. Ryan Schroeder, Administrator Ms. Sandra Ashley Helling, Finance Director City of Ramsey 15153 Nowthen Boulevard NW Ramsey, MN 55303 Re: Recommendations for the Issuance of: $1,525,000 General Obligation Temporary Improvement Bonds, Series 1992A $620,000 General Obligation Improvement Bonds, Series 1992B We respectfully request your consideration of our recommendations for the issuance of these bonds according to the terms and conditions set forth in the attached Terms of Proposals. Each Issue will be discussed separately, with items common to both to follow. $1,525,000 General Obligation Temporary Improvement Bonds, Series 1992A The proceeds of this issue will be used to finance construction costs of a substantial portion of Phase I of the City's Wood Pond improvement projects, 91-13 and 91-14, in the City's Tax Increment District No. 5. The assessments for the Wood Pond projects are expected to be filed in 1992 for first collection in 1993 over a term of five years. Assuming interest is charged on the unpaid balance at a rate of 7.30%, the City would expect average annual assessment collections of $373,800 on Phase I of the Wood Pond projects. Delays in collecting such large assessments needed for debt service payments could be a substantial financial burden on the City and its taxpayers. It is the recommendation of both Springsted and the City's Bond Council that the City finance these two projects using a three year temporary improvement bond issue rather than a long- term definitive issue. Temporary bonds have three main advantages. First, they reduce the initial risk to the City by deferring principal until the third year, exposing the City only to the interest cost which will be at a short-term interest rate. Secondly, the City has the option when the temporary bonds mature to refinance them as temporary bonds for a additional three years or refunding them as longer term bonds. If the development occurs as projected and assessments are paid as expected, the assessment income received during the first three year period would be used to reduce the amount of the refunding issue. A second temporary issue ,!