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ELK RIVER MUNICIPAL UTILITIES <br />ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 201 I AND 2010 <br />Note 2: DETAILED NOTES ON ALL FUNDS-CONTINUED <br />Advance Refunding <br />On April 21, 2010 [he Utilities issued $1,265,000 of G.O. Capital Improvement Plan Bonds, Series 2010A, bearing <br />an average coupon rate of 3.58 percent, to provide resources for [he advance refunding of $1,270,000 of the <br />outstanding principal of the City Hall Expansion Revenue Bonds, 20026 on February I, 2013. The proceeds of the <br />Series 2010A Bonds were deposited into an Escrow Account which shall pay issuance costs and purchase securities <br />bearing interest to provide sufficient funds to pay the principal and interest on the 20026 bonds due April 21, 2010 <br />through February I, 2013 and pay the $1,125,000 called Revenue Bonds of 20026 on February I, 2013. As a result <br />of the refunding issue, [he 20026 bonds were defeased and the Utilities will save $97,000 in debt service payments <br />and achieve an economic gain (the present value of the difference between the old and [he new debt service) of <br />$90,824. <br />44 <br />