Agenda - Council - 05/26/2015 - Laserfiche WebLink

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Executive Summary of Proposed Debt Proposed Issue: Purposes: Authority: Term/Call Feature: Bank Qualification: $3,970,000 General Obligation Capital Improvement Plan Bonds (CIP), Series 2015A The proposed issue includes financing for the reconstruction of Fire Station #2. Debt service will be paid from ad valorem property taxes. The Bonds are being issued pursuant to Minnesota Statutes, Chapter: • 475.521 The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. The Bonds count against the City's General Obligation Debt Capacity Limit of 3% of estimated market value (EMV). In the City, the EMV for pay 2014 is $1,795,975,400. Therefore, the total amount of outstanding debt cannot exceed $53,879,262. As of February 10, 2015, the City has $20,050,000 subject to the legal debt limit (this amount does not include the 2015A Bonds). In addition, a separate limitation under the CIP Act is that, without referendum, the total amount of principal and interest in any one year on all CIP Bonds issued by the City debt cannot exceed 0.16% of the total estimated market value in the municipality. In the City, that maximum annual debt service amount is $2,873,561 for the Pay 2014 tax year ($1,795,975,400 x .0016). The annual principal and interest payments on the CIP Bonds proposed to be issued under this CIP will average approximately $280,000. If you include other CIP debt outstanding, the annual principal and interest payments on all CIP debt will be approximately $1,608,000. As such, debt service on the CIP Bonds will be within the annual limits under the CIP Act The Bonds are being issued for a 20 year term. Principal on the Bonds will be due on December 1 in the years 2017 through 2035. Interest is payable every six months beginning December 1, 2015. The Bonds maturing on and after February 1, 2024 will be subject to prepayment at the discretion of the City on February 1, 2023 or any date thereafter. Because the City is issuing less than $10,000,000 in the calendar year, the City will be able to designate the Bonds as "bank qualified" obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Presale Report — 2015A Bonds March 10, 2015 City of Ramsey, Minnesota Page 1