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Home My WebLink About3A - General Obligation Bonds H: IBONDSIA02bonds.DOC DISCUSSION: J~; u~ ~;.~; 1, 1.< Cv~J ClV\ rVlo~- STAFF AGENDA REPORT SEPTEMBER 16, 2002 9A RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING NEGOTIATED SALE OF $1,050,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 2002 Introduction The City's bond and fiscal consultant Steve Mattson from Juran & Moody will be present during the Council meeting to request Council approval to negotiate the sale of general obligation bonds in the amount of $1,050,000 to finance improvements associated with the Pixie Point street reconstruction project (Project 02-11). History The City Council approved Resolution 02-84 on April 15,2002 that accepted the feasibility report for the reconstruction of various streets within the Pixie Point area during 2002 that would be financed by a combination of general obligation bonds, trunk, enterprise and water quality fund appropriations. A summary of those improvements and their costs in round numbers are listed below: Project Description Project Financin2 1. Pixie Point street reconstructi on G.O. Bonds ... Trunk Reserve ... Enterprise Fund... Water Quality ... Project Total... $1,050,000.00 $220,000.00 $419,000.00 $80,000.00 $1,769,000.00 Subsequently, the public hearing for these 2002 improvement projects was conducted on March 18, 2002 and Resolution 02-55 ordering the improvement was approved. Current Circumstances In previous sales the Council has authorized a negotiated bond sale directly from Juran & Moody. Staff would propose a similar process for this sale. The advantage of the negotiated sale method versus public sale is the flexibility it affords the City because our fiscal consultant, Steve Mattson would attempt to time the sale of bonds with the market in an effort to obtain the lowest interest rate possible. Also, the City saves itself the fiscal fee of$13,500.00. 16200 Eagle Creek Ave. S.E.. Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER >- CITY COUNCIL AGENDA REPORT September 30, 2002 3A Frank Boyles, City Manager AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE ISSUANCE OF $1,050,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 2002. DISCUSSION: History: At the September 16, 2002 meeting, the City Council authorized the negotiated sale of $1,050,000 General Obligation Improvement Bonds. Steve Mattson of Juran & Moody has completed a negotiated sale for City Council consideration. Current Circumstances: Steve will be prepared to review the terms of the negotiated sale with the City Council. A copy of the September 16, 2002 agenda report on this subject is attached for Council information. ISSUES: In the past, negotiated sales have allowed the City to take advantage of market circumstances and attain very favorable interest rates. ALTERNATIVES: (1) Motion and Section to approve a Resolution Authorizing the Sale of $1,050,000 General Obligation Improvement Bonds of 2002. (2) Take no action. RECOMMENDED MOTION: Alternative (1). ~r<M JvtJ{.~: R~ Nf)d' cJ);Jp r;J AJ-1,:",' ~ r~ tl:,tk w .-1- c). fvl~ l..'j JdL 0- b~.- u- io'-H' ~w( ('M-f. I )1~ - '"" y;: .~. J; i ~w L~,f- . ~ 11 ttr:p,IZ1f if5, ~ & l1'\ vvwvrwurJ (frv '" ~ ) '$~~ ~;.~+~, ,',' \;). I ' JJ J j .:Jt, JWIk . rv.6L k J.s'JvJ, W 10 r,.w>,rui,j;";+rw.f T ~', "5~ WVI Urvf ~ : J .. ~~r::: ~W\ ~ 1kI,~ ~'ff~f '" ~n4 , Ai" ~ j. ho ~ q~ · f~~. '. A4.uJ',f ~~@/~4) ... ' - . ' L{~w ''D~ ~:tt IN" F'~ f~ ~ el,..); prw J, .{hc~ ~ · V>-<-< . ~ IY 11< ~ :IX 10 k .;. ~ ~ f~ /;; Fr> {OW>MfoV , I\P . WJ .h 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 1:\COUNCIL\AGNRPTS\2002\NEG BOND SAL,.ffi.~L OPPORTUNITY EMPLOYER H:\BONDSIA02bonds.DOC ALTERNATIVES: RECOMMENDED MOTION: REVIEWED BY: Attachments: Attached is a worksheet from Juran & Moody that provides additional detail with respect to debt service principallinterest payments, projected assessment stream and annual special tax levies necessary to amortize this bond issue. The second page lists the estimated coupon and net effective interest rates for this bond issue plus it identifies the financing costs and other miscellaneous information. Financial Imvact The estimated special tax levy calculation associated with this bond issue has already been factored in along with the City's proposed general fund operating budget levy, revolving equipment fund levy and other special debt levies for payable 2003 property taxes. The following alternatives are available to the City Council: 1. Approve a Resolution Authorizing Negotiated Sale of $1,050,000 General Obligation Improvement Bonds of 2002. 2. Delay financing to a future time as determined by the City Council. Motion and second to approve a Resolution Authorizing Negotiated Sale of $1,050,000 General Obligation Improvement Bonds of 2002. Steve Mattson will be present at the meeting to discuss the resolution and answ r any questions the Council may have with respect to the bo d' uance process. 1. Reso ution Authorizing Negotiated Sale of $1,050,000 General Obligation Improvement Bonds of 2002 2. Juran & Moody Bond Analysis RESOLUTION 02-XX ~/NNESO'\~ RESOLUTION AUTHORIZING NEGOTIATED SALE OF $1,050,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 2002 MOTION BY: SECOND BY: WHEREAS, The City of Prior Lake has conducted the appropriate public hearings to consider comments regarding those public improvement projects deemed necessary for construction in 2002; and WHEREAS, The City Council has determined that such construction projects scheduled for 2002 are consistent with the City's Capital Improvement Plan (CIP); and WHEREAS, The City of Prior Lake has complied with all requirements of Chapter 429 of Minnesota State Statutes with respect to special assessment improvement projects; and WHEREAS, The City of Prior Lake has awarded the construction bids for Project 02-11 Pixie Point for street reconstruction; and WHEREAS, It is necessary to issue general obligation bonds for the purpose of financing these construction improvements. NOW THEREFORE, BE IT RESOL YED BY THE CITY COUNCIL OF PRIOR LAKE, that it has determined it is in the best interest of the City of Prior Lake to enter into a negotiated sale with Juran & Moody, in an effort to obtain the lowest interest rate possible, for the issuance of $1,050,000 of general obligation improvement bonds, and the City Manager is hereby authorized to convene a special meeting to approve the bond sale pursuant to the procedural requirements of State law. Passed and adopted this 16th day of September, 2002. YES NO Haugen Gundlach LeMair Petersen Joe Zieska Haugen Gundlach LeMair Petersen Joe Zieska (Seal} City Manager City of Prior Lake 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 H:IBONDSIRcs02.DOC AN EQUAL OPPORTUNITY EMPLOYER N 0 0 N ... 0 C'-l Q . Z 0 c:I ~ ~ ~ ~ ~ 0 > C'-l 0 W c:: ~ c:.. ~ - - ~ Z ~~ 0 - ~ j <I: e" c:: - ...;! 0 c:I 0 Q;l 0 0 0 c:.. ~ O~ ... lI"l 0 O~ :>- W .... Z ~ ~ - f;I;l U e" .... ~ ... 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C'-l Name ofIssuer CITY OF PRIOR LAKE, MINNESOTA Type of Bond GENERAL OBLIGATION IMPROVEMENT BONDS OF 2002 PAR AMOUNT: $1,050,000 Sep-30-2002 Oct-1-2002 DATE OF ANALYSIS DATED DATE OF BOND ISSUE : PRIOR LAKE 429 21 ANNUAL SURPLUS CUMULATIVE /DEFICIT BALANCE TAX LEVY TOTAL STATUATORY CAPITALIZED ASSESSMENTS DEBT COVERAGE INTEREST ASSESSMENT INTEREST @ ASSESSMENT SERVICE 105.00% 0 MONTHS PRINCIPAL 8.00% INCOME FINAL INTEREST RATES INTEREST (12-1) YEAR PRINCIPAL 0.00 11,453.12 19,007.37 25,059.62 30,029.87 34,233.12 37,984.37 41,546.12 45,075.87 48,783.62 326.87 326.87 326.87 326.87 326.87 326.87 326.87 326.87 326.87 0.00 11,453.12 7,554.25 6,052.25 4,970.25 4,203.25 3,751.25 3,561.75 3,529.75 3,707.75 (48,456.75) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $326.87 72,000.00 69,000.00 69,000.00 69,000.00 69,000.00 69,000.00 69,000.00 69,000.00 69,000.00 69,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $80,560.00 72,928.00 69,536.00 66,144.00 62,752.00 59,360.00 55,968.00 52,576.00 49,184.00 45,792.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $38,160.00 30,528.00 27,136.00 23,744.00 20,352.00 16,960.00 13,568.00 10,176.00 6,784.00 3,392.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 190,800.00 $42,400.00 42,400.00 42,400.00 42,400.00 42,400.00 42,400.00 42,400.00 42,400.00 42,400.00 42,400.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 424,000.00 141,106.88 134,373.75 132,483.75 130,173.75 127,548.75 124,608.75 121,406.25 118,046.25 114,476.25 163,248.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ,307,473.13 134,387.50 127,975.00 126,175.00 123,975.00 121,475.00 118,675.00 115,625.00 112,425.00 109,025.00 155,475.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ,245,212.50 34,387.50 27,975.00 26,175.00 23,975.00 21,475.00 18,675.00 15,625.00 12,425.00 9,025.00 5,475.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 195,212.50 1.50% 1.80% 2.20% 2.50% 2.80% 3.05% 3.20% 3.40% 3.55% 3.65% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 150,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ,050,000.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 - $693,000.00 (+) NORTHLAND SECURITIES INC. STEVEN J. MATTSON MANAGING DIRECTOR 612-851-5919 800-851-2750 614,800.00 (+) 0.00 (+) (-) $424,000.00 40.38% 8.00% 2003 10 11/15/2002 AMOUNT OF ASSESSMENTS PERCENT AGE OF ISSUE ASSESSED: INTEREST RATE ON ASSESSMENTS FIRST INSTALLMENT COLLECTION: # OF ANNUAL INSTALLMENTS: START DATE OF ASSESSMENTS