HomeMy WebLinkAbout5 - Issuance of General Obligation Equipment Certificates for 1993
AGENDA:
REQUESTED BY :
SUBJECT MATTER:
DATE:
INTRODUCTION:
BACKGROUND:
DISCUSSION:
5
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF RESOLUTION 93-03
AUTHORIZING THE ISSUANCE OF $500,000 GENERAL
OBLIGATION EQUIPMENT CERTIFICATES OF 1993
JANUARY 19, 1993
Staff is requestin9 approval by the Council
for the City of Pr10r Lake to issue equipment
certificates in the amount of $500,000.00. The
purpose for these bonds are to finance the
purchase of equipment by the Prior Lake Fire
Department.
The City Council authorized the acquisition of
a heavy duty rescue rig and a large 1500 GPM
pumper fire truck on September 21, 1992.
Subsequently, on October 5, 1992, the Council
awarded the contract to Custom Fire Apparatus,
Inc. in the aggregate low bid amount of
$462,556.00.
Since it takes approximately nine to
months to build the trucks, the plan
issue financin9 at a later date to
interest carry1ng cost.
According to the contract, prepayment in the
amount of $118,000.00 is due upon receipt of
the two chassis at the factory. The balance is
due upon delivery of the pumper and rescue
trucks to the City.
twelve
was to
minimize
Custom Fire Apparatus has notified the City
that they expect to take delivery of the truck
chassis for equipment furnishing near the end
of February. To facilitate our payment
obligation at this time it would be necessary
for the City to sell equipment certificates in
order to have funds for disbursment on hand by
March 1, 1993.
The bond issue is to be structured over a time
periOd of five years with an interest payment
only scheduled for 1993 and principal payments
for the years 1994-97. The bonds shall be
purchased under a modified negotiated sale
format whereby both our fiscal consultant,
Juran & Moody Inc. and Prior Lake State Bank
will submit a bid proposal.
4629 Dakota St. S,E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
RECOMMENDATION:
ACTION REQUIRED:
The anticipated application of proceeds of the
bonds are estimated and itemized as follows:
Equipment purchases
(includes $13,000.00 of
Discount Factor
Capitalized Interest
Bond Re9istration
Bond Pr1nting
Grand Total
... $475,750.00
misc. equipment)
... 9,800.00
14,561. 25
1,400.00
500.00
$502,011. 25
. . .
Rounded for Bond Issuance
$500,000.00
The price quotations are due at noon on
January 19, 1993. The calculation of the
lowest net effective rate will be determined
at that time and presented by steve Mattson
during the Council meeting. An average coupon
under 4.00% could be achieved which is
excellent in today's market.
A resolution a~proving the sale of the
e9Uipment certif1cates shall be prepared and
d1stributed at the meeting by steve Mattson.
Staff would recommend that the Council adopt
the resolution and appove the sale of the
equipment certificates to the appropriate
successful bidder.
Motion to approve Resolution 93-03 Authorizing
the Issuance of $500,000.00 General Obligation
E9Uipment certificates to the institution
Y1elding the lowest net effective interest
rate.