HomeMy WebLinkAbout8A - Gen. Obligation Bonds
AGENDA #:
PREPARED BY:
SUBJECT:
DATE:
INTRODUCTION:
BACKGROUND:
DISCUSSION:
8A
RALPH TESCHNER FINANCE DIRECTOR
CONSIDER APPROVAL OF RESOLUTION 95-57 AUTHORIZING
ISSUANCE OF $950,000 G.O. IMPROVEMENT BONDS OF 1995
JULY 3, 1995
The City's bond and fiscal consultant Steve Mattson from Juran & Moody
will be present during the Council meeting to request Council approval for
a public sale of bonds in the amount of $950,000 to finance improvements
associated with Ridgemont Avenue - Project 95-01, Creekside Circle -
Project 95-02, Grainwood Shelter, Memorial Park Restrooms and the
City's cooperative agreement share of improvement costs for CSAH 18
and CSAH 44.
The City Council approved Resolution 94-61 on December 5, 1994 which
accepted the feasibility report for a number of projects identified for
construction during 1995 which were to be financed by a combination of
general obligation bonds and various fund appropriations. A summary of
those improvements are listed below:
Project Description
Project Financing
1. Creekside Circle
2. Ridgemont Avenue
3. Grainwood Park Shelter
4. Memorial Park Restrooms
5. CSAH 83 Trail Project
6. CSAH 18 Improvements
7. CSAH 44 Improvements
G.O. Bonds
G.O. Bondsrrrunk Reserve
G.O. Bonds
G.O. Bonds
Capital Park/Street Collector
G.O. Bonds
G.O. Bonds
Subsequently, the public hearings for Creekside Circle and Ridgemont
Avenue street overlay and utility improvements were conducted on
February 6, 1995 and Resolution 95-09 ordering the respective
improvements was approved.
The structure of the bond issue itself would be based upon the following
components:
Creekside' Circle
Estimated Construction...
Engineering (18%)
Administration (5%)
Financing (7V2%)
$125,334.00
22,560.00
6,266.00
9,400.00
16200 Eagle Creek Ave., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTIJNITY EMPLOYER
Rid~emont Avenue
Estimated Construction...
Engineering (18%)
Administration (5%)
Financing (7V2%)
Trunk Reserve Funding
$164,542.00
29,618.00
8,227.00
12,340.00
<102,026.00>
Grainwood Shelter
Estimated Construction...
Engineering (18%)
Administration (5%)
Financing (71h%)
$11,494.00
2,069.00
575.00
862.00
Memorial Restrooms
Estimated Construction...
Engineering (18%)
Administration (5%)
Financing (71h%)
$49,804.00
8,965.00
2,490.00
3,736.00
CSAH 18
Estimated Construction...
Engineering (13 % )
Financing (7V2%)
$53,097.00
6,903.00
3,982.00
CSAH 44
Estimated Construction...
Engineering (15 % )
Financing (7V2%)
$435,071.00
65,261.00
32,630.00
Rounding
<$3,206.00>
TOTAL...
$950,000.00
The above financing expenses represent 7 V2 of the construction amount
and are detailed below:
Subtotal...
1,000.00
2,500.00
4,000.00
5,500.00
13,500.00
18,400.00
18,050.00
$62,950.00
Bond PrintinglPublishing ...
Bond Registration ...
Bond Counsel ...
Bond Rating ...
Fiscal Fee ...
Capitalized interest (5 mos.) ...
Discount factor (1.90%) ...
Approximately 220/0 of the bonds will be recovered thru payment of
special assessments. The remainder will be levied against the overall
property taxes within the City. If bid today, a net effective interest rate of
51;4 % would probably be a close estimate. The minimum interest rate of
8%, as per the City Assessment Policy, is to be charged on the Creekside
Circle and Ridgemont Avenue assessments.
T
The bond issue is to be dated 8/1/95 and will will be structured 10 years in
length. The following is a schedule of tax levies/assessment terms and
their corresponding amounts necessary to amortize the bond debt:
10 year assessment stream ...
10 year property tax levy ...
Total ...
$211,000.00
$739.000.00
$950,000.00
TAX IMPACT:
The special levies associated with the 1995 construction improvements are
expected to generate the following estimated 1996 property tax increases
on homesteaded residential property:
Market Value: $85,000 $100,000 $120,000 $150,000 $175,000
Tax Increase:
$12.90
$16.86
$22.12
$30.02
$36.61
These levies would represent a projected 3.4% increase in property taxes
for next year.
ALTERNATIVES:
The following alternatives are available to the City Council:
1. Approve Resolution 95-57 Authorizing Public Sale of $950,000
General Obligation Improvement Bonds of 1995.
2. Delay financing to a future time as determined by the City Council.
RECOMMENDATION: Staff would recommend the City Council to approve Resolution 95-57
Authorizing Public Sale of $950,000 General Obligation Bonds of 1995.
Steve Mattson will be present at the meeting to discuss the resolution and
answer any questions the Council may have with respect to the bond
Issuance process.
REVIEWED BY:
ACTION REQUIRED: solution 95-57 Authorizing Public Sale of $950,000
provement Bonds of 1995.
A9503. WRT
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