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OVERVIEW <br /> This report describes the proposed plan for the Economic Development Authority of the City <br /> of Elk River, Minnesota(the "EDA") to issue $1,695,000 City Hall Expansion Revenue . <br /> Bonds, Series 2002B (City of Elk River Lease Purchase Obligation) (the "Series 2002B <br /> Bonds"). This report has been prepared by Ehlers & Associates, Inc. in consultation with <br /> EDA Staff and bond counsel. This report deals with: <br /> • Purpose and components of bond issue. <br /> • Structure. <br /> • Other considerations in issuing bonds. <br /> • Market conditions. <br /> • Issuing process. <br /> PURPOSE <br /> The Series 2002B Bonds are being issued by the Authority to provide funds to construct an i <br /> 8,588 square addition to the City Hall which will house the Elk River Municipal Utilities <br /> offices (the "Project"). Construction on the Project is expected to begin Summer, 2002 and <br /> be completed by Summer of 2003. <br /> The Series 2002B Bonds are being issued pursuant to the powers provided or referenced in <br /> Minnesota Statutes, Sections 469.090 -469.1081, a Supplement to Lease Purchase <br /> Agreement to be dated September 1, 2002, a Supplement to Lease Purchase Agreement dated <br /> December 1, 1997, and the original Lease Purchase Agreement dated November 1, 1991 <br /> (collectively referred to as the "Lease") between the Authority and the City of Elk River(the <br /> "City"), and a Supplement to Trust Indenture to be dated September 1, 2002 and Supplement <br /> to Trust Indenture dated December 1, 1997 to the original Trust Indenture dated November 1, <br /> 1991 (collectively referred to as the "Indenture") between the Authority and U. S. Bank <br /> National Association, St. Paul, Minnesota(the "Trustee"). The original City Hall building <br /> was financed through a similar lease purchase financing structure in 1991. The Series 2002B <br /> Bonds are considered to be "additional bonds" to the 1991 financing, which means that the <br /> two bond issues share rights to lease income and security on a parity basis. <br /> The Lease: Pursuant to the Lease, the Authority will lease the facility to the City, subject to <br /> the City's right to terminate the Lease at the end of any Fiscal Year. Lease Payments are to <br /> be made by the City in amounts sufficient to pay the principal of and interest on the Bonds <br /> when due. <br /> • <br /> Page 1 <br />