Loading...
HomeMy WebLinkAbout9A - GO Bonds 2.74M 60C.1 NtivrvEso�P Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: JUNE 23, 2014 AGENDA#: 9A PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR PRESENTED BY: JERILYN ERICKSON AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE NEGOTI- ATED SALE OF $2,740,000 GENERAL OBLIGATION BONDS OF 2014 DISCUSSION: Introduction The City's fiscal consultant, Steve Mattson from Northland Securities Inc., will be present during the Council meeting to request Council approval for the negotiated sale of general obligation bonds in the amount of$2,740,000 for the following pro- jects and the refunding of the 2008B bonds: Crest Avenue/Carriage Hills $ 1,750,000 Maplewood $ 282,000 CSAH 44 $ 95,000 Total $ 2,127,000 The resolution includes a not-to-exceed amount of$2,900,000 to provide flexibility in the amount to bond based on any last minute change orders, change in funding, etc. History The following table includes significant dates related to the new projects included in this bond issue: Council Crest Avenue/ Maplewood CSAH 44 Action Carriage Hills Feasibility N/A 11/12/2013, N/A Report Res 13-169 Accepted Public N/A 12/09/2013 N/A Hearing for Improvement Improvement N/A 12/09/2013, N/A Ordered Res 13-182 Contract 04/14/2014, 04/14/2014, Cooperative Awarded Res 14-056 Res 14-044 Agreement with Scott County Current Circumstances In previous sales the Council has authorized negotiated bond sales directly from Northland Securities. The current economic market climate is favorable for the is- suance of low cost bonds due to very low interest rates although rates have fluctu- ated significantly during the past month. Based upon current market conditions Northland Securities anticipates the actual sale in early August, 2014 but will delay it if it appears that rates will be declining in the near future. Mr. Mattson and Ms. Omdal (also from Northland Securities) will review the market conditions with the Mayor, City Manager and Finance Director prior to marketing the bonds. Ulti- mately, the final purchase price and interest rate will be subject to Council ap- proval. The structure of the bond issue itself will be based upon the following components in rounded amounts for the new projects: Crest Avenue/ Maplewood CSAH 44 TOTAL Carriage Hills Estimated Project Costs $ 1,750,000 $ 524,000 $ 95,000 $2,369,000 Less: Water Fund Contri- 0 < 168,000> 0 < 168,000> bution Less: Sewer Fund Contri- 0 < 74,000> 0 <74,000> bution Less:Water Quality Fund 0 0 0 0 Contribution Less: Trunk Fund 0 0 0 0 Less: Grant Funding 0 0 0 0 Less: MSA 0 0 0 0 Less: MNDOT 0 0 0 0 Less: Other Funding 0 0 0 0 Net Bond Issue $ 1,750,000 $ 282,000 $ 95,000 $2,127,000 2008 Bond Refunding 501,000 Capitalized Interest 29,000 Bond Issuance Costs 82,000 Rounding for$5000 1,000 Increments Total Bond Issue $2,740,000 Attached is a bond analysis worksheet (Exhibit A-3 pages)from Northland Securi- ties Inc. that provides additional detail with respect to the estimated cost and net effective interest rates for this bond issue (new money portion), financing costs, debt service principal/interest payments, projected assessment stream and annual special tax levies necessary to amortize this bond issue, and other miscellaneous information. A combined estimate of costs, etc. for the new money issue and the bond refund- ing is attached as Exhibit B (1 page). The City's bond counsel, Briggs & Morgan, has reviewed all of the necessary bond documents. Northland Securities has prepared the attached resolution providing for the issuance and sale of the general obligation bonds. During the week of July 14, 2014, the City Manager, Finance Director, Mr. Mattson and Ms. Omdal will participate in a bond rating call with the rating agency. The City currently has Aa2 bond rating from Moody's Investor Rating Services. Conclusion The City Council should consider adopting the attached resolution which provides for the issuance and sale of bonds. ISSUES: The projects that are included in this bond issue are in varying stages. The coop- erative agreement with Scott County was approved for the CSAH 44 project. The construction contract for the Crest Avenue/Carriage Hills has been awarded and the project is well underway. The construction contract for the Maplewood Avenue improvement was awarded and construction has not started. FINANCIAL The size of the bond issue was originally anticipated in the 2014-2018 CIP to be IMPACT: approximately $6.6 million with tax levy supporting $2.95 million. Based on these figures, the estimated annual tax levy was $354,000. The bond issue has been significantly reduced primarily due to projects being de- layed for a variety of reasons including grant requests, funding concerns, etc. This allowed the bond issue amount to be reduced to $2,225,000 (for the new money portion of the bond) which will reduce the annual tax levy impact from $354,000 to approximately $243,000. ALTERNATIVES: The following alternatives are available to the City Council: 1. Adopt a Resolution Authorizing the Negotiated Sale of$2,740,000 General Obligation Bonds of 2014. 2. Table this item for a specific reason. RECOMMENDED Alternative 1. MOTION: CERTIFICATION OF MINUTES RELATING TO GENERAL OBLIGATION BONDS, SERIES 2014A ISSUER: City of Prior Lake, Minnesota BODY: City Council KIND, DATE, TIME AND PLACE OF MEETING: A regular meeting held on Monday, June 23, 2014, at 7:00 p.m., in the City Offices MEMBERS PRESENT: MEMBERS ABSENT: Documents Attached: Extract of Minutes of said meeting. RESOLUTION APPROVING THE ISSUANCE OF GENERAL OBLIGATION BONDS, SERIES 2014A I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said obligations; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS MY HAND officially as such recording officer on June , 2014. City Manager EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, STATE OF MINNESOTA HELD: Monday, June 23, 2014 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Prior Lake, State of Minnesota, was duly held on Monday, June 23, 2014 at 7:00 p.m. Member introduced the following resolution and moved its adoption: RESOLUTION APPROVING THE ISSUANCE OF GENERAL OBLIGATION BONDS, SERIES 2014A BE IT RESOLVED by the City Council of the City of Prior Lake, State of Minnesota (herein,the "City"), as follows: 1. The City Council hereby finds and declares that it is necessary and expedient for the City to sell and issue its fully registered general obligation bonds in the total aggregate principal amount not to exceed$2,900,000 (herein,the"Bonds"). The proceeds of the Bonds will be used, together with any additional funds of the City which might be required to: (i) pay the costs of construction of street improvements within the City (the "Street Reconstruction Portion"); (ii) current refund all or a portion of the December 15, 2015 through 2018 maturities, aggregating up to $540,000, of the City's General Obligation Refunding Fire Station Bonds, Series 2008A (the "Current Refunding Portion"); and (iii)pay the costs associated with issuing the Series 2014A Bonds. 2. The City Council desires to proceed with the sale of the Bonds by direct negotiation with Northland Securities, Inc. ("NSI"). NSI will purchase the Bonds in an arm's-length commercial transaction with the City. 3. The Mayor and the City Manager are hereby authorized to approve the sale of the Bonds in an aggregate principal amount not to exceed$2,900,000 and to execute a bond purchase agreement for the purchase of the Bonds with NSI, provided the True Interest Cost is less than % for the Street Reconstruction Portion and the total net savings is at least $ for the Current Refunding Portion. 4. Upon approval of the sale of the Bonds by the Mayor and the City Manager, the City Council will take action at its next regularly scheduled or special meeting thereafter to adopt the necessary approving resolutions as prepared by the City's bond counsel. 5. NSI is authorized to prepare an Official Statement related to the sale of the Bonds. 6. If the Mayor and City Manager have not approved the sale of the bonds to NSI and executed the related bond purchase agreement by October 31, 2014, this resolution shall expire. The motion for the adoption of the foregoing resolution was duly seconded by Member , and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. § § U ! )- § \ I- la a a 7 < ( > § D § m 10 § § \ § 2 \ § § r. Co 74 ; § § 2K ) , _ - ) \ « n § ` / 0 - � q ) z ( 2 § - § u, < 2 / 74 ri k ® � 7 § ' Y. o ) k ] \ < / ) § " � � z \ ) \ $ z§ ili § \ = ,; < / \ O .. § G § ( o0- z 6 ° P kul< , ( k cg o L. ) § \ k K § \ ) < ) z ) a a u ow z ( § § § - \ § § \ a. ) k ( [ § o � ■ Li , . aa - - 8 . , mm ■ ¥ ■ §§ } § gym , \ § § n22 § VI j d « § 2 ( ° k / nmaaM . riFiri � 2k § § § § ! IIA? \\) k) \ § ) ) 4 @ - a X "xgiXx ; 5P. \ § k / ; ) asp , § , � , & r m § t q te } rk § 6.61 1-o § ( ƒ k � b kE § ] § E , z $ „ > § / g k ( g § ( ! ` § e s k 9 ' z § Vi ° ° 2 ` k ( 0 - - a0 Cd. ` O _::4• CI k 2 < z § < VflU i- V � § ( § j o `u< -r< , ( } § } § � � / ) 7 § L'. ( § } § § � § § § § § k a v. .0 t x a - N t' Y v r x a - - N .^. 7 < ^ - S4,'-.1 N N N N ri ri rJ N N M: i I M. 13.1 N CI N N N N N N N N N ry N N N N N N CI C1 N W H (.] = e C c .r N ? K ?` Y 7 Y K ? ? ? ? Y Y 7 K Ca FA (.. ^ a r1 7 rl N N N rl CI CI rl N rl rlaz a: CI z F U W r ^ 04 v ^ N N .tr.:" ri M• - C' .. a. 4 4 4. W O a ,Q Y1 n n xp , -9. ' , C 7 ? 7 -4' ? 7 �T 'R ai '.. Q^, �l - N M 7 N N -' N Vy .Z. W W.,a Q U MI w > W Q a P�rii L`, p� a a =E w ..(l 't C' n a 7 C' •NG N a r •• -• .r U U p ul r1 a2 J U q 7 b a; 7, x r N - 4 z ,z ti n r r a v : t v I W W E al tr. ZD0 CwvlN8 < v,� z z ...3 G 00 _ 0 tZ< a � 0 z >i .... F<- o z Z Q © •••i a a O II: N ri v. ^ =0 a ^ ^ N 7 Ci y'r e ? 7 rit .r v. x W ON N r?`1 N Cl CI N N N N et y E. to Z ^ c O c - j a P j • r� Q V, xl - •J a .a a a o0 a0 'C r N (0,� T az VI 2< W C4 0 uH Z U Li) - s c X - = - H "I..U v N - r. FC Z5 N �g., Si t LZ4 X z /a V'1 Y �1 r,3 Vim'/ vi 'l V'1 �1 V; v) a 0 h Z n n n n r n n r r r (.7t . , . ¢a O o n _± Q 0. 0o F N 11 b V = H ,..1� vrWeg < u O N, a 0 a N b z2 N a ww -< U C7 U [1 ��... Ix 17 o c a o c _ x F 2 0< - oC . as 7 7 N =1 N• a . 5h. y Of u p <UJ M 7 ,'.1 1 .a^ vI 7. o vl _T -4 1`•w 2 <W �` " N .e eek{ a 'C N x x r _ ET< Q 0 V N N N N N N N N et N ' r. CI Z F 0. N J F a1 < ClU o C o ^ vl .r' x Y F c ^ ^: o ^ r rl v. .ri v. L]' O❑ 4 » oo ^: F d Lil - ,, .rrl r{ "Pi• 7 c - '"! N - " M M Y Y. v .r V T .r it. .� N N N I- N ri N ri CI N K CI F . . ? = - = I c 1^ CI v. •'r. Zr:N N N x b x 'NI a .r. 1. x x O f7 V, M1 N V1 Cl N < C ^ Y C1 �C "r C qd F M r M M N ni N ^ ^ Y ri J F o o ;s s o 0 0 0 a x o a 0 Fy h _ a - a a ^ a y yO Ii.1 a< rt•••, v r{ vl rn G N r. Y . . . . . . . . = C Ill C. • N N N N Z 0 N - W Z W - u E>. m J c c g a J 0 W r a o c = o • • • • • 0 o • • v u Z R z c c ri 'A rj rn i K { O W Q V a N N N CI CI N C C N Ci O O O W tY < v. .0 r -0 a N M. Y Y. L n 7D P. N Ir F �, ..a < rl N N N CI N N CI N Sy..l. M, M, tr, t•: <t7 < (j' w N N N N N N CI N N N CI N CI N N N N N N C N =, f1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 OOOOOOOOOOOOOOO OOOORO E.0 2 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 - w) c!. o' s M o rw v, r, co_ v-, A z CT ON Q� ON CO 00 0o rCT N 640 .I E. E. o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o a o 0 .. 0 0 0 0 0 0 0 0 2 0:4 0 0 0 0 0 0 o o 0 0 o c o 0 0 0 0 0 0 0 0 E., cn 113 o r ,-, co s , rn %o en Q Cl) r� N N N .- VI Q 0 Q 0 0 0 0 0 0 0 0 0 0 0 0 0 0 C 0 0 0 0 0 0 000 O O O O O O O O O o O O O O O O O O E. W a 0 0 0 0 0 O 0 0 0 0 O C O O o 0 o 0000 F- U) Z v: v' 'n vl u `n yr vZ c A w a r6' r r" r r r r r r r N N a 0 Q 1 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 F" 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o o O Z o 8 II O N N ELI ELI 0 0 0 0 0 0 0 0 0 0 0 0 0 O do o 0 0 0 W 0 .•, O 0 O O 0 0 0 0 0 0 0 2 p tn. N CT VD ClO r <f W U ... O CT CT CT CT 00 00 00 r W ,rN _ r Q v) Z 69 Cl) w a Q OV0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CO 0 0 •a j Z E. 0 0 0 0 0 0 0 0 0 0 O o 0 o O O 0 o O o O Q rn m g 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 F E O fs1 0 0 0 0 0 0 0 0 0 0 0 ,� 0 W Eu UUUF N F z w o o r v .• oo �n cl. rn 0 cn r V2I Z Z ��-+ 4, N N N .r ., - .wa w a w v) cwn 0 2 cn ENLI z ,.a 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Z 14 0 0 c::: 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 u.1 U) E_ < y `" � n' 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 c c o 0 0 00 Q > Q Z Z Q (4 Q v1 U h v' �n 'n 'n v, v3, v� v' 0 W -� O W vv)i d M Z r r r N N N N r r N 0 'n Q Z w 64 0 E- e" E.V) .7E. < r N N N N N r' N N N N M M m m M "'1 Eia Ey" N Z Q Q 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 p. W . Aw" NNNNNNNNNNNNNNN NNNNN W h Eu, a 0 ... _ * cnn Preliminary / /4/ 6 ) /� '/ City of Prior Lake,Minnesota 1C G.O.Bonds of 2014 Refunding g Summar y Dated 08/15/2014 i Delivered 08/15/2014 Issue New Money Refunding Summary Sources Of Funds Par Amount of Bonds $2,225,000.00 $515,000.00 $2,740,000.00 Transfers from Prior Issue Debt Service Funds - 40,000.00 40,000.00 Construction Fund Earnings - 500.00 - 500.00 Total Sources $2,225,500.00 $555,000.00 $2,780,500.00 Uses Of Funds Deposit to Project Construction Fund 2,127,000.00 - 2,127,000.00 Deposit to Crossover Escrow Fund - 541,402.50 541,402.50 Costs of Issuance 39,855.00 _ 5,000.00 44,855.00 0 Total Underwriter's Discount (1.350%) 30,037.50 6,952.50 36,990.00--- Deposit to Capitalized Interest(CIF)Fund 29,400.00 - 29,400.00 --- --...-------------- Rounding Amount -_ (792.51 1,645.00 852.50 Total Uses $2,225,500.00 $555,000.00 $2,780,500.00 Flow of Funds Detail State and Local Government Series(SLGS)rates for __-- Date of OMP Candidates Primary Purpose Fund Solution Method Net Funded Net Funded Net Funded Total Cost of Investments $2,127,000.00 $541,402.50 $2,668,402.50 Total Draws $2,127,000.00 $541,402.50 $2,668,402.50 Capitalized Interest Fund Solution Method- Net Funded Net Funded Net Funded Original Bond Proceeds _ 29,400.00 - --- 29,400.00 Accrued Interest - Total Draws _ $29,400.00 - $29,400.00 PV Analysis Summary(Net to Net) Net PV Cashflow Savings @ 1.792%(Bond Yield) - 58,636.17 - Transfers from Prior Issue Debt Service Fund - (40,000.00) - Contingency or Rounding Amount - 1,645.00 - Net Present Value Benefit - $20,281.17 - Net PV Benefit/ - Refunded Principal - 3.756% - Net PV Benefit/ - Refunding Principal - 3.938% ---- Bond Statistics Average Life - -_ 6.025 Years 2.848 Years 5.428 Years Average Coupon 1.8984212% 0.9497727% 1.8048745% Net Interest Cost(NIC) 2.1224702% 1.4238068% —____- 2.0535746% —------- Bond Yield for Arbitrage Purposes _ 1.7916242% 1.7916242%_ 1.7916242% True Interest Cost(TIC) - 2.1285089% 1.4346256% 2.0578151% All Inclusive Cost(AIC) 2.4561984% 1.7898598% 2.3875725% 08aref I Issue Summary I 6/13/2014 1 11:26 AM Northland Securities Public Finance Page 1