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Council confirming the sale. Ms. Lund advised these certificates will be paid back over a period of five years with a yearly debt service levy. The certified levy amount for 2007 payable was $189,257. Staff recommends that Council adopt a resolution authorizing the issuance and awarding the sale of $790,000 General Obligation Equipment Certificates of 2007. Committee action was taken with Case No.2. Case #2: Authorization of the Issuance and Awarding the Sale of $955,000 General Obligation Tax Increment Refunding Bonds, Series 2007B Finance Officer Lund reviewed that in 2001 the City issued $920,000 General Obligation Tax Increment bonds for the construction of 141st/143rd Avenue. Refinancing through a Tax Increment Refunding Bond in the amount of $955,000 would result in a savings of approximately $25,000. Mr. Paul Donna, Northland Securities, informed the Committee that Moody's has upgraded the City's rating to Aa3 from AI. Only 20% of the 199 cities Moody's rates in Minnesota have a rating of Aa or better, and Ramsey is moving in the right direction. Moody's incorporates the City's debt factor and economic base into their analysis. The report submitted by Moody's highlights the City's trend of tax base and finance operations; it makes note of the challenges Ramsey has had over past few years with state aid reduction and how the City addressed that. Councilmember Elvig asked how often the City's bond rating is evaluated. Mr. Donna replied an analysis is done when the City goes into the market for bonds. Moody's also periodically comes out with an annual review if a city has not issued bonds in a while. Rating agencies represent the investing public so they can rate the city when they would like. Mr. Donna distributed the summary of results on $790,000 General Obligation Equipment Certificates of Indebtedness, Series 2007 A and the $955,000 General Obligation Tax Increment Refunding Bonds, Series 2007B. He reported the General Obligation Equipment Certificates of Indebtedness will be financed over a five year term at a fixed rate locked in at 3.75%. The overall average annual payment will be $175,721; that levy will be outside of levy limits. He reported the General Obligation Equipment Certificates of Indebtedness Series 2007B would basically replace the interest rates on the old issue with a lower rate. The average rate on the old bonds is 4.66%, which will be replaced at 3.95%. Total principal will be refunded at a little over $900,000, with a net savings to the City of $25,427. This includes all fees. He explained there is cost efficiencies involved in doing the refunding bonds with the Series 2007 A bonds. Councilmember Elvig inquired about the likelihood of refinancing bonds for the municipal center when rates are low. Mr. Donna indicated there is a constant overview on the debt of the City. There is a call date on every type of bond issue of when it can be refinanced. Refinancing can be done sooner than the call date, but it will be more efficient the closer it is to the call date. The economic benefit of the refinance typically only occurs on the call date or after. Finance Committee / February 13, 2007 Page 2 of5