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

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City of Ramsey, Minnesota December 12, 1991 shown in Schedule B. The non-refunded principal and interest, namely the April 1, 1992 debt service payment, is shown in Schedule C. The estimated debt service for the new refunding bonds is in Schedule D. The City will begin to pay debt service on the refunding bonds on August 1, 1992. The final maturity of the refunding bonds will be February 1, 1996, the same year as the original 1984 Bonds. An analysis of the anticipated savings based on current rates in the bond market is contained in Schedule E. Appendix VI is the recommended cash flow for the refunding portion of the issue. Column 7 of Appendix VI is the projected assessment income (provided by the City) expected to be received on those projects originally funded with the 1984 Bonds. The projected assessment income in Column 8 exceeds the debt service requirements on the refunding bonds, resulting in annual surplus in collection years 1993-1995 as shown in Column 9. These surpluses can be used by the City to offset levies on the new money portion of this issue, or reduce or cancel levies on other City improvement bond issues. Combined Issue Appendix VII is the combined debt service for the City's current improvement projects and the refunding of the 1984 Bonds. The combined issue will be dated February 1, 1992, and mature each February 1, 1993 through 2001. The first payment on the bonds will be an interest payment due August 1, 1992 in the estimated amount of $14,800. This payment will be made from special assessment and tax collections received in 1992 on both the new portion and refunding portion of this issue. The following February 1, 1993 principal and interest payment will be made from second-half collections of assessments and taxes collected in 1992 and surplus first-half collections. Due to the small size and short repayment schedule of the issue, it is our recommendation that the bonds not be subject to call so that maximum marketability is achieved. We would expect the City to pay a penalty in the form of higher interest rates if an early call provision was provided. Common to Both Issues These bonds are subject to federal arbitrage regulations, however, it is our understanding the City does not anticipate issuing more than $5,000,000 of tax-exempt bonds during 1991 and therefore can qualify as a small issuer, exempt from the reporting and rebate requirements. Also, the City may designate these bonds as "qualified bonds" under the Tax Reform Act of 1986, making the bonds more attractive to banks as investors in these bonds. As with all issues of the City, we recommend an application be made to Moody's Investors Service of New York for a rating of these issues. We will provide Moody's with the necessary data upon which they will make their rating analysis and make the application on your behalf. We do not anticipate a change in the City's "A" rating from Moody's. Springsted Incorporated has joined with Capital Guaranty Insurance Company, a municipal bond insurer, to offer a surety bond service to underwriters in lieu of putting up a good faith check in order to bid on the bonds. The program is called "Sure-Bid" and we have allowed for its use in the Official Terms of Offering, attached to these recommendations. We believe that the use of this bidding option will help garner more bids for the bond sale, since it has the potential to make it easier for an underwriter to bid. There is no cost to the City for this service, nor does Springsted Incorporated have a financial interest in the use of Sure-Bid. For underwriting firms which have been approved and have entered into a reimbursement agreement with Capital Guaranty and have' elected to use Sure-Bid instead of physically Page 5