6.5. ERMUSR 10-15-2003 - Laserfiche WebLink

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City of Elk River, Minnesota Pre-Sale Report October 13, 2003 Proposed Issue: $2,020,000 General Obligation Water Revenue and Refunding Bonds,Series 2003B Purpose: To fund$975,000 in new project costs for various water main construction projects currently refund on February I,2004, 5475,000 of the water geO. and PIR portion Series 19938, and $510,000 of the G.O. Water Revenue Bonds, Series 1994D. Attached is an exhibit which demonstrates the breakdown of the sources and uses of funds for the proceeds. Term: The total term of the Bonds will be 10 years of a on August I,2004,and the final February n ont with the 4.interest payment principal payment on Feb 1,2014. The new money portion of the bond issue will not commence principal payments until February 1,2010 to allow for adequate debt service coverage in the next few years. Call Feature: The Bonds maturing in 2012 and later can be called on February 1,2011. Rating: The Bonds are expected to be rated by Moody's Investors Service at an"A2"level. Funding Sources: Water revenues are expected to cover 100%of the debt service. Bank Qualification: The City does not expect to issue more than$10,000,000 in the calendar year 2003 and has not issued any conduit financing which would exceed the limit. Therefore the Bonds are expected to be bank qualified. Discussion Issues: The current rates on the two issues being refunded are up to 5.2%in 2009 for the 1993B Bonds and 6.5% in 2010 for the 199413 Bonds. The new bonds are expected to have coupons in 2009 of 3.75% and 4.15% in 2010. The present value savings after all fees expected on the refundings is$35,000 to$40,000 plus the benefit of reducing the costs of issuance for the new money portion and reducing paying agent fees from three issues to one combined issue. Schedule: Pre-Sale Review by City Council: October 13,2003 Review by Elk River Municipal Utilities: October 15,2003 Distribute Official Statement: Week of October 27,2003 Conference with Rating Agency: Week of November 3,2003 Bond Sale: November 10,2003 Estimated Closing Date: Week of December 1,2003 Attachments: Sources and Uses of Funds Proposed Debt Service Schedule Resolution authorizing Ehlers to proceed with bond sale Ehlers Contacts: Financial Advisor Mark Ruff(651)697-8505 Bond Analysts: Diana Lockard(651)697-8534 Bond Sale Coordinator: Connie Kuck(651)97-52736 The Official Statement for this financing will be mailed to the Council Members at their home address for review prior to the sale date.