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.~y of <br /> <br />River <br /> <br />MEMORANDUM <br /> <br />Item # 6.5. <br /> <br />TO: Mayor & City Council <br /> <br />FROM: Lori Johnson, Asst. City Administrator/ <br /> Finance Director <br /> <br />DATE: May 5, 1997 <br /> <br />SUBJECT: Liquor Store Financing <br /> <br />At last Monday's meeting I gave you a brief overview of the information that <br />had been received regarding the liquor revenue bond. The information was <br />based on Springsted's analysis of the two bank proposals (The Bank of Elk <br />River and First National together bid two interest rate options) and an <br />estimated underwriter's bid. Springsted's summary indicated that the <br />interest cost would be higher if the banks purchased the bond. However, as <br />we discussed, this was based on an assumed rate from the underwriter and <br />this amount could increase or decrease based on the actual bid. <br /> <br />At the meeting Councilmember Thompson questioned whether or not we <br />could get a firm bid from the underwriter. Although this is unusual and not <br />always appropriate, Springsted did call Dougherty Dawkins and request a <br />firm bid. We felt this information was necessary for the Council to make an <br />informed decision. <br /> <br />We now have more accurate discount and rate information, but not all of the <br />other provisions are known. Based on Dougherty's bid, the difference in the <br />total costs of two issues is minimal, less than $5,000. What this comparison <br />does not take into consideration is the additional staff time that may be <br />required to prepare documents for Dougherty Dawkins that may not be <br />required by the local banks. Also, as I mentioned earlier, at this time I do not <br />know whether the Dougherty Dawkins issue would have any stipulations <br />relating to construction of the Westbound store. <br /> <br />Action Requested <br /> <br />The Council should authorize staff to proceed with the sale of Liquor Store <br />Revenue bonds to The Bank of Elk River and First National Bank of Elk <br />River. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />