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Elk River ,=Z,."- <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Theresa Slominski, Finance and Office Manager <br /> John Dietz—Chair <br /> Al Nadeau— Vice Chair <br /> i <br /> Daryl Thompson—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> June 11, 2013 2.4 <br /> SUBJECT: <br /> Resolution for the Redemption of Electric Bonds 2004A <br /> BACKGROUND: Mark Ruffs, bond consultant with Ehlers & Associates, provides advice on calling, <br /> refunding, and issuing bonds for the City of Elk River and Elk River Municipal Utilities. Mark came out <br /> in May and met with me to review our current bond issues and make recommendations for our <br /> consideration. <br /> DISCUSSION: <br /> We have two debt issues that can be called in 2014 (2006A and 2007A)and could consider refunding <br /> next year, and can be reviewed at a later date. The 2004A bond issue has a remaining principal balance of <br /> $225,000, and will mature February 2015.This issue can be prepaid in 2013 or included with a later <br /> refunding. It makes more sense to prepay this now rather than refund later.This bond issue had a Debt <br /> Service Requirement (DSR) of$94,000 to apply towards the final payment of the bond, leaving $131,000 <br /> for the Utility to pay for the redemption, plus related costs. Redeeming this issue in August, we save <br /> $14,395 in interest payments through 2015. A spreadsheet is attached, providing the information related <br /> to the existing remaining payments and DSR application for redemption. <br /> Given the City of Elk River is the qualified entity to issue bonds, the resolution must be approved by the <br /> City Council to be effective. Mark, on our behalf, requested Kennedy and Graven to prepare the <br /> necessary resolutions for the Utility Commission and City Council to act upon in order to redeem this <br /> bond issue. Successful action from the Utility at the June I 1 meeting would bring it before the City <br /> Council on June 17 for action. The resolutions are attached for your review. <br /> ACTION REQUESTED: <br /> Staff recommends that the Elk River Municipal Utilities authorize and request the City Council to redeem <br /> the 2004A Electric Bonds in August 2013, per the attached resolution. <br /> w <br /> rP 0 W I R 1 0 B <br /> r e Page 1 of 1 <br /> NATURE <br /> Reliable Public <br /> Power Provider P O W E R E D T o S E R V E <br />