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Home My WebLink About7B - Gen. Obligation Equip Cert AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: DISCUSSION: 7B RALPH TESCHNER FINANCE DIRECTOR CONSIDER APPROVAL OF RESOLUTION 95-84 AUTHORIZING ISSUANCE AND SALE OF $400,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF 1995 AUGUST 21, 1995 The Fire, Parks and Public Works departments are scheduled for replacing and upgrading a number of their existing trucks and equipment. Because the equipment, for the most part, represents large and costly items to purchase it is necessary to finance the major portion by issuing equipment certificates. Staff is requesting approval by the Council for the City of Prior Lake to sell such bonds in the amount of $400,000 for the purpose of financing the majority of the costs associated with such equipment. The remaining balance of the acquisition cost is to be offset by a $177,500 appropriation from the Equipment Fund and $155,000 contribution from the Sewer and Water Enterprise Fund balance as authorized in Resolution 95-75. It has been the policy in the past to issue equipment certificates every 4 years. The last certificates were issued in 1991 in the amount of $375,000. The increased amount is primarily the result of keeping pace with our City's growth and corresponding capital needs and inflation. Typically, the departments consolidate their equipment requests to accommodate this bonding time table. All of the equipment and respective amounts correspond with the City's current CIP document and bids were formally approved per Resolution 95-75 Awarding Bid for Purchase of Capital Equipment. The following is a list of equipment, financing costs and revenue source summary: EXPENDITURES: Department Equipment CQsl Fire Dept. Fire Pumper Truck $204,085.00 (accessory equip. allowance) $2,679.00 Parks Dept. Tractor Turf Mower $22,838.00 $68,402.00 Public Works Dept. Plow/Wing $24,873.00 Plow/WinglSander $27,787.00 Tractor Backhoe $40,228.00 Cab-Chassis $50,543.00 Front End Loader $115,735.00 Jet-Vac $155,330.00 16200 Eagle Creek Ave., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNrIY EMPLOYER Bond Issuance Fees Underwriter costs Bond Printing Bond Registration Legal Opinion Discount Factor (1 Y2%) Capitalized Interest $450.00 $500.00 $1,400.00 $2,000.00 $7,840.00 $7.810.00 Total costs... $732,500.00 REVENUE SOURCES: Equipment Certificates Equipment Fund Appropriation Enterprise Fund Contribution Total revenues... $400,000.00 $177,500.00 $155,000.00 $732,500.00 AL TERNA TIVES: The following alternatives are available to the City Council: 1. Approve Resolution 95-84 Authorizing the Sale and Issuance of $400,000 General Obligation Equipment Certificates of 1995. 2. Amend the resolution to include an amount as determined by the Council 3. Delay financing to a future time by tabling action for further consideration. RECOMMENDATION: Staff would recommend the issuance of $400,000 of equipment certificates to be amortized over a period of four years. It is anticipated the net effective interest rate will fall somewhere between 4'14% and 4'12% The advantages of utilizing this debt instrument is that the acquisition costs can be more equitably and evenly distributed over the community tax base. The debt is relatively short term and carries a lower interest rate when compared to lease purchase financing. Steve Mattson from Juran & Moody Inc. will be present at the meeting to discuss the resolution establishing the date of public sale. BUDGET IMPACT: No immediate impact upon the 1995 operating budget would result as the interest payment for this year would be provided by the capitalized interest from the bond proceeds. All subsequent year bond payments will be paid by property tax levies. The 1991 equipment certificate levy will have expired this year, subsequently no overlapping debt will occur. REVIEWED BY: ACTION REQUIRED: esolution 95-84 Authorizing Issuance and Sale of ligation Equipment Certificates of 1995. JURAN3.WRT EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE C7TY OF PRIOR LAKE, MINNESOTA HELD: August 21, 1995 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Prior Lake, Scott County, Minnesota, was duly held at the City Hall in said City on Monday, the 2~st day of August, 1995, at o'clock, .m., for the purpose, in part, of authorizing issuance of, and awarding the sale of, $400,000 General Obligation Bquipment Certificates of ~995 of the City. The following members were presen~: and the tOllowing were absent: Member and moved its adoption: introduced the following resolution Resolution Number 95-84 RESOLUTION AUTHORIZING ISSUANCE AND SALE OF $400,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF 1995 A. WHEREAS, the City Council of the City of Prior Lake, Minnesota (the "Citylf), has heretofore determined and declared that it is necessary and expedient to issue $400,000 General Obligation Equipment Certificates of 1995 (the "Certificates") pursuant to Minnesota Statutes, Chapters 475 and Minnesota Statutes, Section 4~2.30~, to finance the acquisition of various capital equipment for the City (the "Equipment"); and B. WHEREAS, each item ot Equipment to be financed by the Certi.ficates has an expected useful life at least as long as the term of the Certificates; and c. WHEREAS, the principal amount of the Certificates does not eXl:eed 0.25% of the market value of the City; and D. WHBREAS, no other obligations have b~en sold pursuant to a private sale within the last twelve (l2) calendar months of the date hereof which when combined with this issue ~ould exceed the $lJ20Q,QOO limitation on negotiated sa~e3 as 2""'3n.2 - " :-~~~::~;~~ '.:.~.~ .. ;:. ~ ~ ': -, : c ::~r!: ~ ~.:'i~.. ~.- ~": ~ ,,"," -- required by Minnesota Statutes, Section 475.60, subdi~ision 2(2)j and B. WHERFAS, the offers set forth on Exhibi.t A attached hereto were received and opened in the presence of the City Manager, or designee, at the City Hall~ earlier this same day; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Prior Lake! Minnesota, as follows: 1. Acceptance of Offer. The offer of (the "Purchaser"), to purchase the Certificates of the City (or individually a "Certificate"), at the rates of interest hereinafter set forth, and to pay therefor the sum of $ , plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable offer received and is hereby accepted, and the Bonds are hereby awarded to the Purchaser_ 2. Title; Original Issue Date; DenominationSi Maturities. The Certificates shall be titled "General Obligation Equipment Certificates of 1995'., shall be dated September 1, 1995, as the date of original issue and shall be issued forthwith on or after such date as fully registered certificates_ The Certificates shall be numbered from R-1 upward in the denomin- ation of $5,000 each or in any integral multiple thereof of a single maturity. The Certificates shall mature, without option of prepayment, on December 1 in the years and amounts as follows: Year Amount ~ 1998 1999 Amount 1996 1997 $90,000 95,000 $105,000 110,000 3. Purnose. The Certificates shall provide funds to finance the Equipment. The total cost of the Equipment, which shall include all costs enumerated in Minnesota StatutesJ Section 475.65, is estimated to be at least equal to the amount of the Certificates. Acquisition of the Equipment Shall proceed with due diligence to completion. The City covenants that it shall do all things and perform all acts required of it to assure that acquisition of the Equipment proceeds ~ith due diligence to completion. 4. Interest. The Certificates shall bear interest payable semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), conunencing June 1, 1.996, calculated on the oasis of a 360-day year of twelve 3D-day months, at the respective ratas per annum set forth opposite the maturity years as follows: 2963n.2 2 ',. .... - . ~ . . - - . .... -..... ... - - - ."". ," .. ..... ..... '" - - .... . .... - :,.. -., ~ ::.., .:\0., :'::i: : :<T-;.~ ': .~~ :'( ~ ...,,'..... ..-- ...... -.... Maturity Year Interest Rate Maturity Year Interest Rate 1996 ~997 J. . 1998 1999 % 5. No Rede~tion. The Certificates shall no~ be subject to redemption and prepayment prior to their maturity. 6. Registrar. , in , is appointed to act as registrar and transfer agent with respect to the Certificates (the "Registrar"), and shall do so unless and until a successor Registrar is duly appointed, all pursuant co any contract the City and Registrar shall ~~ecute which is consistent herewith. The Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Certificates shall be paid to the registered holders (or record holders) of the Certificates. 7. Headings. Headings in this resolution are included for conven2ence of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. The motion for the adoption of the foregoing resolution was duly seconded by member and, after a full discussion thereof and upon a 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. l . , 296372.2 3 . "".... - " ... ... .". . """,' ....... -..... '"' ~: . ~ ~ . ': : ~. c ::~~i~ ~ :'.~.i~. ~ ~ :; ;\ :) ~ ~:'; . ~.; :- I t".. ~_ .~ ,- M . .. . ... -... .. -." '.' AWARD: DATE OF SAlE: MOODY'S RATING: TABULATION OF BIDS CITY OF PRIOR LAKE. MlNNESar A $400,000 GENERAL OBUGATION EQUIPMENf CERTIFICATES OF 1995 PRIOR LAKE STATE BANK MONDAY, AUGUST 21, 1995 EXISTING A BIDDFR NEf INTEREST RATE INfEREST RATE PRIOR LAKE STAEBANK JURAN & MOODY, INC. 4.40% - 1996 4.60% - 1997 4.70% - 1998 4.80% - 1999 PURCHASE PRICE: $400,000.00 4.693% 4.10% - 1996 4.25% - 1997 4.40% - 1998 4.50% - 1999 PURCHASE PRICE: $393,200.00 4.982% ,..-........... ~ z < = ~ E-< < E-< r:t.l ~ ~ < ....J ~ o ; ~ Cl:: ta::l C'-) < ::r: u Cl:: ;J ~ ~ ..... ~ o fJ) ~. ~ u t= ~ E-t ~ ~ U E-t <z b~ fJ)~ ~g~ 51 ~ ~ ~ 0 ~ ~~~ ~~ ~ :3 .. ~~~ ~~O ~~~ ~~~ t::~< Ue,:)~ If) ~ ~ :: - ffl N CXl ~ ~ 2 t < ~ Ui ~ Vl lJ.. ~ ~ Q fir Vi 6 ~ ~ ~ j < 0 c:a:: z ~ 0<< ~ ~ Q ~ 0 8 Ui t.Ll ..... ..J E; ~ t:i: Q Q g @ II) t'- (I; ~ d ~ ~ ~ ~ f::: 8 S<~ ~ ~ ~ ~ 0 ~.....~ ~t3M8~888 5j~g~~~~ ~<~.fr--:-('f) ~ CXl ~ U ~;gt: ="l~888 ~~~;;{~r;~:td~ ~ ~ ~ ~ <S ~ ""'!1} ~ <S;8~::,d~~ ~ 0\ - .-;- c:a:: t.Ll CXl ~ t.Ll t t.Ll V'J ti t.Ll E-< < Cl ~ E-< o ti:: r:: ~ ~ - c:a:: t.Ll t: ~ c:a:: t.Ll ::c E-< ....: >- c:a:: :j l.Ll < CXl ~ ~ Z t.Ll Z f.rl ;S Q ~ Q V'J ~ Q z l.Ll < Z ~ :=: - ::r:: ....;U t.Ll < Z l.Ll ~ Z ..... 0 g,; cJ ;;;.: zz ~~ S ~ 8~8~ ~...;~~ ~zr\~ Z~N~ <....~i '" ta::l .... . :JE-<\C>.... ~ C'-) ffi ~ >- ~ ~ lJ.. o Z o t o 5 o ::c t: ~ ~ < (/) t.Ll E-< < U u: ~ l.Ll U ...J ....J < I~ ~ ~ ::c o ~ o ~ ::r:: E-< ~ .-;- c:a:: l.Ll CXl ~ l.Ll U l.Ll Q Ui 0::: ~ E-< ~ (/) t.Ll E-< < U Ii: ~ t.Ll U ~ ~ l.Ll ~ -_._-h~---'---'-'--'------'-'---'-'-----'---"-"'--l-._._._-_._-~-,_.._,----_..,.__.__._....._--.~_.__....,-.." ~ ~Q~ ~~ -~~ o~o -0('1 ::c<;; t.Ll -~~ b>g ~~ ~ ~ -.o!';tri 6 ~ ~~ -<Vi > >- E-< t3 0 ~ ~ (i~ ~ E-< ~ ~ :.< >- l.Ll t.Ll ~t::~~ ~ 0::: 0::: d ~ U o ~ g ~ ~ ~ ZO:::~d Q'z~t.Ll -< j < > - ~ - ..... - o ~ C"i ~ ~ :1l ~ ~ 8 ~<S r..: ..0 iii iii 0 \&....".foS M l'""l ('f'l M ~>..... g ~~~~~~~~$ E-<~~~~~~o~ ~r--:-t:t: g .................... ~ Q Q E-< lJJ V'J l'""l N ~ iii :5 l.Ll ~ ~ ~-' ~ 0:: < u € >- ~ 0::: 8 o iii S E-< < fi; @ ....J E-< t.Ll <ffiu bQ;; E-< ffl V'J e Q E-< ....J V'J ~ $~E-< fi: ~ ;2 e ....J -~ ~ t3 ~ z -~ ~ ~ ~ ~ ~ 8 Q<~ ~ ~ ~ ri d ~<ti 4II'!t ~~~$8~i ~~~~dgz: * . 8 $ ~ ~ ~ gg 8 ~ '~ ~ iii 0 ...s,~ ...... ;;....~ b~b.!i?b~~~ ~~~~~" o u 26" ..:l U << as "l ;J ;0.- ~~~ r-:ci~ t'-,O -< ::; ~ ~ ~ ~ ~*~~ r--:-r--:-r--:-r--:- M~~88~ ~~~~o~ 06I()O- iii -:::~~ G: ~8888~ ocilli~~o~ ~ C'l C'l C'l ~~titi fR ..... ........ ............ ~ E-< V'J ~ t.Ll ~ ~8888~ ocilli~~d~ ~ C'l C'l N ~:!~tri ~ b.!i? ~ ~ ~ b"? ~~g&58 -i o;i -i o;i 0 888888 ~~~~o~ o tri iii a ~- 0\0\0- ~ -- ~~~~~~~ ;;,... - ~ iii 0\ ..... 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