Agenda - Council - 09/25/1984 - Laserfiche WebLink

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I I I I I I I I I I ! ! I i i I Mr. Lloyd Schnelle City of Ramsey Page 2 more than 10% above the estimated cost of the improvement. This procedure will result in the City being unable to order an improvement or sell bonds until after bids are let. The procedure formerly followed by the City, Minnesota Statutes, Chapter 429~, does not have the 60 day waiting period and allows cities to issue bonds at the time an improvement is ordered prior to the award of bids.~ n~e ~hat section 210.13 of your proposed public improvement '0~ance ~o~have language which authorizes the issuance of bonds at the time an improvement is ordered; however this language must be read with the language in charter section 8.05.03 which does not allow the City to order an improvement until bids are received. The practical result of the extension in time needed to issue bonds will be to lessen the flexibility of the time of issuance, make the interest cost estimates of your financial consultants more uncertain and perhaps increase your bond costs. iThe cloud of uncertainty over the constitutionality of your charter provisions exist because the charter provisions are new and different from the procedures contained in Minnesota Statutes, Chapter 429% The procedures contained in Chapter 429 have been litigated and tested by court action, but the charter procedures have not. Chapter 429 proceedings have been found to meet the constitutional requirements of due process and equal protection. The Charter procedures have not been litigated. Ultimately they probably would be judged constitutional but uncertainty will remain until that occurs. Uncertainty about the procedures could result in higher bond rates in the bond market which traditionally has been conservative about new procedures. An increase in bond issuance costs will occur simply because the City will have to follow new procedures and generate new forms of resolutions and notices to comply with the proceedings mandated by the charter. All the new forms will have to be reviewed both by the city attorney and by bond counsel. ~.n conclusion, the charter provisions will in the I .immediate future increase the City's cost of financing improvements through the issuance of improvement bonds.