Agenda - Council - 06/28/2016 - Laserfiche WebLink

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Executive Summary of Proposed Debt Proposed Issue: Purposes: $1,735,000 General Obligation Street Reconstruction Bonds, Series 2016A The proposed issue includes financing for the 2016 road reconstruction and overlay projects in the City It is the intent of the City to levy special assessments in the amount of approximately $419,705 and $2,850 to benefiting property owners for the street reconstruction and overaly projects respectfully. These assessments will be levied in 2016 for collection in years 2017 through 2025 at a rate of 2% over the True Interest Cost of the proposed Bonds. Annual assessments are paid on an equal principal basis. The City anticipates receiving $50,000 in prepayments on the road reconstruction portion (approximately 12%) and 100% of prepayments on the overlay portion of the project ($2,850) so the Bond size has been reduced accordingly. Debt service will be paid from special assessments and a tax levy. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter: • 475.58 3b Term/Call Feature: Bank Qualification: Rating: Presale Report City of Ramsey, Minnesota 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 pay 2016 EMV is $2,095,735,200. Therefore, the total amount of outstanding debt cannot exceed $62,872,056. As of May 16, 2016 the City has $24,070,000 subject to the legal debt limit. The City held the required public hearing on it 5-year street reconstruction plan on March 10, 2015. The Bonds are being issued for a 10 year term. Principal on the Bonds will be due on December 15 in the years 2017 through 2026. Interest is payable every six months beginning June 15, 2017. The Bonds maturing on and after December 15, 2025 will be subject to prepayment at the discretion of the City on December 15, 2024 or any date thereafter. Because the City is expecting to issue no more than $10,000,000 in tax exempt debt during 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. The City's most recent bond issues were rated "AA+" by Standard & Poor's. May 24, 2016 Page 1