Agenda - Council - 07/28/1981 - Laserfiche WebLink

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-5- The debt of the MWCC that is subject to the Investment Framework is the Metropolitan Council bonds and the assumed debt. Although the MWCC is crediting cities and townships for the local government debt and the current value credits, this debt is still a liability of the local governments, and, therefore, is not included under the Investment Framework Debt Indicator and Debt Service Policy. b. Metropolitan Council Bonds From January 1970 to April 1972, the Metropolitan Council sold $103.7 million in bonds. These funds, together with $7.7 million in Federal Water Pollution Control Administra- tion (FWPCA) grants, were intended to finance $105.8 million - in treatment plant and interceptor improvements, planning studies and design engineering. Subsequently, the federal government raised its share from one= -third to 55 percent . - and, more recently, to 75 percent. The State of Minnesota contributed 25 percent for a time, which has been reduced to 15 percent.* The grant reimbursements have financed the construction needs until the present time. Because of the high cost of the first two bond issues which were sold in the first half.of 1970 (average interest rates of 6.78 percent and 6.94 percent, respectively), it was advantageous to enter into an advanced refunding program for those issues. The refunding bonds were sold at an average rate of 6.42 percent. All of the bond issues sold by the Metropolitan Council for the MSSB, including the refunding bonds, are callable on or about Jan. 1, 1985. Therefore, the entire debt program should be reviewed in 1983 or early 1984 to determine the funding program for the next two decades. (The callable bonds will be discussed later.) The debt directly incurred for the MSSB and the MWCC and still being retired by the Metropolitan Council is composed of - .three bond issues as shown in Table I. Table 1 EXISTING METROPOLITAN COUNCIL /MWCC BONDED DEBT Issue Date June 1, 1971 April 1, 1972 Oct. 1, 1975 Initial Amount $14,.000,000 33,700,000 50,900,000 Longest Maturity 19.5 years 24.75 years 15.25 years Average Rate 5.1293% 4.9308% 6.4161% * Regional Fiscal Profile, June 1979, page 66. Metropolitan Council