Agenda - Council - 10/14/2014 - Laserfiche WebLink

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Executive Summary of Proposed Debt Proposed Issue: Purposes: $875,000 General Obligation Equipment Certificates, Series 2014A The proposed issue will finance the purchase of capital equipment in 2015, 2016 and 2017. The debt service for the General Obligation Equipment Certificates, Series 2014A will be paid from ad valorem property taxes. Authority: The Certificates are being issued pursuant to Minnesota Statutes, Chapter(s) 412 and 475. Term/Call Feature: Bank Qualification: Rating: Basis for Recommendation: If the amount of equipment certificates issued is more than .25% of the taxable market value, a public hearing and reverse referendum must be held. The total equipment certificate is under the maximum amount of debt limit proscribed in the law. The Certificates will be general obligations of the City for which its full faith, credit and taxing powers are pledged. The Certificates are being issued for a 10 year term. Principal on the Certificates will be due on August 1 in the years 2015 through 2024. Interest is payable every six months beginning August 1, 2015. The Certificates are being offered without option of prior redemption. Because the City is issuing less than $10,000,000 in the calendar year, the City will be able to designate the Certificates as "bank qualified" obligations. Bank qualified status broadens the market for the Certificates, which can result in lower interest rates. The City's most recent bond issues were rated AA+ by Standard & Poor's. The City will request a new rating for the Certificates. If the winning bidder on the Certificates elects to purchase bond insurance, the rating for the issue may be higher than the City's bond rating in the event that the bond rating of the insurer is higher than that of the City. Based on our knowledge of your situation, your objectives communicated to us, our advisory relationship as well as characteristics of various municipal financing options, we are recommending the issuance of the General Obligation Equipment Certificates as a suitable fmancing option because this option is the only viable option available to finance this type of project under state law and is the most overall cost effective option that still maintains future flexibility for the repayment of debt. Method of Sale/Placement: In order to obtain the lowest interest cost to the City, we will solicit Presale Report October 14, 2014 City of Ramsey, Minnesota Page 1