5.1. SR 05-10-1999 - Laserfiche WebLink

Home Browse Search

. . . City of Elk River, Minnesota May 5, 1999 No. 19 ("TIF 19"). A small portion of the issue ($145,000) is structured to be repaid from a general ad valoren tax levy (see page 13, column 9 for estimated tax levies). However, if all other revenue streams are received, as projected by City staff and the developer, an ad valorem tax levy should not be required for repayment of the bonds. New development within the Highway 10 development area has not yet begun and the projected revenues from special assessments and tax increment revenues are based on a number of assumptions that mayor may not materialize. In the event of revenue shortfalls, the City will be required to use other available City funds or levy general ad valorem taxes to make timely debt service payments on the bonds. Debt service schedules for the bonds are shown on pages 8 through 13. A separate debt service schedule is presented for each source of repayment, followed by a debt service schedule for the total bond issue. The total bond issue is shown on page 8, along with a summary of the sources of revenues pledged to the repayment of the bonds, except general property tax levies. As you will note in column 15 an overall surplus of revenues over debt service requirements is projected if revenues are received as anticipated. Assessment Portion of Bond Issue Pages 16 through 19 show the projection of assessment income. Assessments totaling $4,186,380 were filed on December 3, 1998, with interest accruing beginning on September 1, 1999. The balance of assessments are expected to be filed before September 1, 1999. All assessments will be filed over a term of 15 years with even annual principal payments and interest charged on the unpaid balance at a rate of 1.5% over the rate on the bonds. As noted on page 7 a number of assumptions are being made as to the actual collection of special assessments. First, a total of $420,420 of assessments are expected to be deferred under Minnesota Statutes, Section 273.111, which permits the deferment of assessments on unimproved (unplatted or agricultural) property until such time as the property is developed ("green acres"). At the recommendation of City staff, we have assumed for structuring purposes that $207,600 of the green-acre deferments will be collected after the first seven years and the remaining $212,820 of green-acre deferments will be collected in the last year of the bonds. Second, although all assessments will be filed over a term of 15 years, it is assumed that assessments associated with the Trott Brook development will come much more quickly. Thus, City staff has advised us that the Trott Brook assessments should be projected to be received over seven years instead of the full 15 years. Please note on the assessment income schedules for the green-acre deferments, on pages 18 and 19, the principal amount includes deferred interest which accrues until the green-acre deferments are terminated and assessments begin to be repaid. The debt service schedule on page 9 shows the special assessment portion of the bond issue. Capitalized interest in column 7 will cover the interest payment due on February 1, 2000. Column 8 is the total net requirement after capitalized interest and column 9 shows the total debt service, including the 5% overlevy. The overlevy is required by State statute as a protection to the City and the bondholders in the event 100% of revenues, in this case special assessments, are not collected as anticipated. Columns 10 through 13 summarize the assessments detailed in pages 16 through 19. An excess of assessment income over debt service requirements is shown in column 14. Please note that the surplus of assessment income in maturity years 2001 and 2002 will also be used to make interest payments on the tax increment revenue portion of the bonds. The first collection of tax increment revenues is not expected to be received until 2002 for the August 1, 2002 interest payment and the February 1, 2003 principal and interest payment. Page 5