8.1. SR 06-04-2012 - Laserfiche WebLink

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CITE' OF ELK RIVER, MINNESOTA NOTES TO FINANCIAL S'T'A'T'EMENTS DECEMBER 31, 2011 Note 4: OTHER INFORMATION — CONTINUED I. Commitments The City has received notice from their power supplier regarding the existing all requirements power contract exercising their right to give ten years notice to cancel the contract. The cancellation date would be effective September 30, 2018. The process has begun to renegotiate the existing contract, or contract with another supplier, In 2007 the City entered into an agreement with Central Minnesota Municipal Power Agency ( CMMPA) to acquire an interest in the CAPX Initiative Brookings Project, a 250 mile new power transmission line between Brookings, South Dakota, and the Twin Cities, In 2011 there was increased opportunity for investment, and subsequent agreements provide an ownership share of $5.6 million or 18.9 %. The return on this investment through CMMPA is designed to provide approximately $124,000 annually over the 40 year project life. The interim financing of the CAPX - Brookings project was closed February 2012 and the principal amount of this note will be paid off with the permanent financing scheduled for spring 2012. J. Subsequent Events On March 15, 2012, the City issued $6,975,000 General Obligation Capital Improvement Plan Bonds and $1,525,000 General Obligation Improvement Refunding Bonds. The $6,975,000 General Obligation Capital Improvement Plan Bonds will be used for the purpose of financing the public works facility expansion and renovation. The $1,525,000 General Obligation Improvement Refunding Bonds were issued to redeem the 2014 through 2018 maturities of the $3,090,000 General Obligation Improvement Bonds, Series 2007C. The bonds were issued in advance of the call date and placed in an escrow account which will be used to pay interest on the Series 2012B Bonds through February 1, 2013; and to pay the callable principal on the Series 2007C Bonds on February 1, 2013, The City will continue to pay principal and interest on the Series 2007C Bonds until the call date. The new refunding bonds have an average coupon rate of 2 percent and will mature on February 1, 2018. The net cash flow savings is calculated at $113,565. 64