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~ .FEB, I2.2004 6:27PM EHLERS & ASSOCIATES N0.6918 P. 2 <br /> <br />February 12, 2004 <br /> <br />EHLERS <br /> <br />& ASSOCIATES INC <br /> <br />Brian Bensen <br />County Administrator <br />Sh~rbume County Courthouse <br />13880 Highway 10 <br />Elk River, lVflq 55330-4601 <br /> <br />Re: $15,000,000 G.O, Ia.il Bonds, Series 2003A <br /> <br />You have inquired about the options available to the County if a Conditional Use Pen'nit (CUP) <br />is required for construction of the jail expansion/'or which the above bonds were issued and if <br />the CUP either requires changes to the plans or is denied. <br /> <br />If the CUP requ/res significant changes in the or/ginal plans and more fund~ are needed to <br />supplement the ofig/nal bond issue, the County does have authority to issue additional bonds for <br />the project. In addition to the additional eomtmetion and architectural/engineering costs, of <br />coarse, the County would incur additional issuance costs for the new issue, and the annual debt <br />service requir~anents for the project would be increased. <br /> <br />If the C~ application is denied, and the County is not able to build the jail expansion at all, the <br />current balance in the Jail Comtmction Fund could be placed into an escrow account and <br />inve~ted to the call date (8/1/09), at which time the remaining bond, could be called in using <br />monies in the escrow account and other funds available to cover the balance. The mount <br />currently in the Jail Construction Fund would be the net bond proceeds, as the County ha~ paid <br />issuance costs, architectural/eng/neering fees, soils testing, etc. out of the original bond proceeds. <br />It is unlikely that interest rates available in the escrow account will be a~ high ~ the average <br />coupon rate on the bonds (about 4%). The result of these two factors will be that the County <br />would need to levy to make up the shortfall each year caused by investing less than the full <br />$15,000,000 of bond proceed, and receiving less than 4% p~ year in the escrow account. <br /> <br />Let u~ know if you need more information or would like some projections nm based upon any <br />estimated additional costs. <br /> <br />Sincerely, <br /> <br />Executive Vice President/Director <br /> L~AD£RS IN <br /> <br />FINANCE <br /> <br />3060 Centre Point~, Dr~w, Roseville, MN 55113-1105 651.697.8500 fax 651,697,8555 www..hl-r$.in~.~om <br /> <br /> <br />