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City of Elk River <br />August 3, 2000 <br />Page 2 <br /> <br />Ehlers works to make Elk River issues attractive to investors, while balancing the <br />needs of the City. The key provisions of each issue (call, discount, structure) <br />receive careful consideration. Each of these items has direct economic implications <br />for the City. We are constantly discussing these matters with the public finance <br />community to ensure that we stay current with a changing marketplace. <br /> <br />Manage debt effectively <br /> <br />Ehlers has proven that effective debt management brings significant economic <br />benefits to the issuer. We will work with City Staff to: <br /> <br />Structure each issue to maximize future options without compromising initial <br />rates. <br />Refund outstanding bonds not at first opportunity, but at best opportunity. <br />Find opportunities to free monies through call or defeasance. <br />Forecast future cash flows to prevent unwanted demands on other resources. <br />Minimize debt issuance, avoiding thousands of dollars in issuance expense. <br /> <br />Ehlers recent experience in Champlin demonstrates the tangible benefits. In 1999, <br />Ehlers completed a financial management planning process for Champlin. One <br />element of the process analyzed all of the City's outstanding debt. We identified <br />three bond issues that could be defeased or prepaid. This step created several very <br />positive outcomes: <br /> <br />The outstanding debt of the City was reduced by $1,325,000. <br />Over $360,000 in excess fund balance and $700,000 in future assessment <br />revenues were freed for other purposes. <br />These monies were used to help create ongoing funding programs for street <br />reconstruction, storm sewers, street lighting and equipment. <br />This money also helped the City shift tax levies to better position itself for <br />the potential reinstatement of levy limits. <br /> <br />Meet development needs <br /> <br />As Minnesota's leading economic development advisor, Ehlers understands the <br />financial implications for cities. By helping Elk River meet development needs, <br />Ehlers adds value through the redevelopment of underutilized areas, meeting <br />complete range of local housing needs, creation of new jobs, and expansion of the <br />tax base. <br /> <br /> <br />