Agenda - Council - 11/12/2014 - Laserfiche WebLink

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Executive Summary of Proposed Debt Proposed Issue: $875,000 General Obligation Equipment Certificates, Series 2014A This report is revised to reflect a chance in the payment dates. The payment dates were changed at the request of bond counsel to demonstrate funds from the 2015 levy are received in time to make scheduled payments. Purposes: The proposed issue includes finance capital equipment to be purchased 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: Rati ng: 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 DecemberAugust 15 in the years 2015 through 2024. Interest is payable every six months beginning JuneAugust 15, 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. Presale Report October 14, 2014 City of Ramsey, Minnesota Page 1