Agenda - Council - 05/22/2018 - Laserfiche WebLink

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Executive Summary of Proposed Debt Proposed Issue: Purposes: $1,210,000 General Obligation Street Reconstruction Bonds, Series 2018A The proposed issue includes financing for the 2018 road reconstruction and overlay projects in the City. Debt service will be paid from a combination of special assessments and ad valorem property taxes. It is the intent of the City to levy special assessments in the amount of approximately $287,375 to benefiting property owners. These assessments will be levied in 2018 for collection in years 2019 through 2028 at a rate of 2% over the True Interest Cost of the proposed Bonds (rounded to the nearest .25%). Annual assessments are paid on an equal principal basis. The City anticipates receiving $15,125 in prepayments (approximately 5%) so the Bond size has been reduced accordingly. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter: • 475.58 3b 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 2018 EMV is $2,460,843,300. Therefore, the total amount of outstanding debt cannot exceed $73,825,299. As of May 16, 2017, the City has $23,920,000 subject to the legal debt limit The City held the required public hearing on it 5-year street reconstruction plan on March 10, 2015. Term/Call Feature: The Bonds are being issued for a 10-year term. Principal on the Bonds will be due on December 15 in the years 2019 through 2028. Interest is payable every six months beginning June 15, 2019. The Bonds maturing on and after December 15, 2027 will be subject to prepayment at the discretion of the City on December 15, 2026 or any date thereafter. Bank Qualification: 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. Rating: The City's most recent bond issues were rated AA+ by Standard & Poor's. The City will request a new rating for the Bonds. If the winning bidder on the Bonds elects to purchase bond insurance, the rating for the issue may be higher than the City's bond rating if the bond rating of the insurer is higher than that of the City. Presale Report City of Ramsey, Minnesota May 22, 2018 Page 1