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<br />rei ---\j <br />( )j <br />tIt< <br /> <br />ITEM #5.9. <br /> <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />Mayor & City Council <br />Lori Johnson, Finance Director I'f ~ <br /> <br />FROM: <br /> <br />DATE: September 13,1999 <br /> <br />SUBJECT: Resolution Initiating the Process for the <br />Sale of the City's General Obligation <br />Improvement Refunding Bonds, <br />Series 1999B <br /> <br />In the past several years, the city has had the opportunity to refund, call, and <br />defease several bond issues due to either a decrease in interest rates or the <br />accumulation of cash in the debt service fund from prepaid assessments. Obviously, <br />it is to the city's advantage to refund and prepay whenever possible to reduce <br />interest costs and to reduce the city's outstanding debt. <br /> <br />. <br /> <br />Currently, the 1994A improvement bonds issued for the Elk Park Center and <br />Northeast Area Improvements and the 1994E improvement bonds that funded the <br />Western Area Phase II Improvements have sizable cash balances. Therefore, these <br />issues are proposed to be refunded (1994A) and defeased (1994E). Action on <br />refunding the 1994A issue is requested on Monday. Action on defeasing the 1994E <br />issue will be forthcoming. <br /> <br />Attached are the Recommendations prepared by Springsted regarding refunding the <br />1994A bond issue and a resolution drafted by Jim O'Meara to authorize the city to <br />start the sale process for the 1999B refunding bonds. The principal outstanding on <br />the 1994A bonds is $2,250,000. The city will prepay $1,150,000 to reduce the <br />amount of the 1999B refunding issue to $575,000. The present value interest <br />savings of this refunding is approximately $70,000. The actual savings will not be <br />realized until the refunding issue is paid. Please see page four of the <br />Recommendations regarding a discussion on the crossover refunding and other <br />details of this issue. The bond sale for the 1999B refunding issue is set for October <br />18, at which time the council will be requested to take action on awarding the issue. <br /> <br />Action Requested <br /> <br />City Council is asked to adopt the resolution initiating the process for the sale of the <br />city's general obligation improvement refunding bonds, series 1999B. <br /> <br />. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br />