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SPRINGSTED PUBLIC FINANCE ADVISORS Home Off~ce 85 East Seventh Place Suite ] 00 Saint Paul. MN 5510].2143 (612) 223-3000 Fax: (612) 223-3002 August 6, 1993 RECEIVED A,s'd ............ ;,20 South S~xth Slree[ Suite 2507 Mmneapoi~s. MN 55402-1800 (6!2) 333-9177 Fax: {612) 349-5230 16655 West Bluemound Road Suite 290 Brookfleld, WI 53005-5935 (4~4) 782-8222 Fax: (414) 782-2904 6800 College Boulevard Sude 600 Overland Park, KS 66211-1533 (9]3) 345-8062 Fax: (913) 345-]770 1800K Street NW Suite 83] Washington, DC 20006-2200 1202) 466.334,~ Fax: (202) 223-1362 Ms. Jessie Hart, Finance Officer City of Ramsey 15153 Nowthen Boulevard NW Ramsey, MN 55303-6197 Dear Ms. Hart: I am writing to follow up our meeting of August 5, at which we reviewed your tax increment financing EDA cash flow projections and our proposed full crossover advance refunding of your General Obligation Tax Increment Bonds, Series 1987A. After reviewing those two documents, it was our mutual conclusion that if the City is going to undertake and utilize tax increment funds for capital improvements identified in the City's 1994-1996 Capital Improvement Plan, that the City should proceed to refund the 1987A issue at its earliest convenience. We have been waiting to make a determination as to whether this issue should be refunded at its call date on February 1, 1997 or whether the City will have sufficient funds in its tax increment cash balance at that time to pay off the bonds in question. It is clear, based on your analysis, the City will be $660,000 short of being able to refund the bonds at their first call date, as the amount to be paid off on February 1, 1997 is $2,245,000 and your projections indicate the City will have at that time an available cash balance of $1,433,453. In addition, it would be important that the City have more than the $2,245,000 available to pay off the bond issue in question. You would need to have additional funds in your cash balance sufficient to meet the cash flow and other project demands that may come up which you are not aware of at this time. The refunding of the 1987A bonds as of July 29, 1993 would realize a net savings to the City of $225,000 with a present value savings of close to $156,000. This represents almost 21% savings of the outstanding interest on these bonds through their current life. The interest rate on the current bonds is 7.11 6%; it is our projection, basedon the market rates as of the date of our analysis, that the new interest rate would be 4.933%. 'The maintaining of your cash fund balance, coupled with the additional savings due to the refunding will give the City maximum flexibility in the future years for utilization in your Capital Improvement Program and other EDA activities. if the Council concurs at your workshop on August 16 with our recommendation, I would suggest that we plan to set sale on the 1987A General Obligation Tax Increment Bonds at your Council meeting September 14 for a bond sale taking place at your October meeting on the