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<br />rei ---'\) <br />( ); <br />tli< <br /> <br />Item #4.1. <br /> <br /> <br />MEMORANDUM <br /> <br />Mayor & City Council <br /> <br />FROM: <br /> <br />Lori Johnson, Finance Director <br /> <br />DATE: <br /> <br />October 18,1999 <br /> <br />SUBJECT: Consider Resolution Providing for the <br />Issuance and Sale of the City's General <br />Obligation Improvement Refunding <br />Bonds, Series 1999B <br /> <br />The attached resolution refunds the city's 1994A Improvement Bonds (Elk <br />Park Center and Northeast Area Improvements) and defeases the 1994E <br />Improvement Bonds (Western Area Phase II Improvements). Special <br />assessment prepayments make the defeasance and prepayment possible. <br /> <br />. <br /> <br />Refunding the 1994A issue requires the issuance of $575,000 of refunding <br />bonds in addition to a cash payment of $1,150,000. Present value savings of <br />the refunding is approximately $65,000, depending on the rate of the new <br />issue. Dave MacGillivray of Springsted will be present at Monday's meeting <br />to deliver the bid results and provide final information on the actual interest <br />savings. Because this is a refunding issue, the savings will be realized in the <br />form of reduced future interest costs. <br /> <br />Unlike the refunding issue, approximately $207,000 will remain in the 1994E <br />debt fund following defeasance. The bonds are being paid in their entirety so <br />the cash remaining and future assessment collections are available for other <br />uses. However, because this bond issue represents only one phase of the <br />entire western area water and sewer project area, staff recommends that the <br />cash balance remaining after defeasance and future assessment collections be <br />reserved for debt payments on the other two phases already financed and on <br />future phases not yet started. Additionally, because the assessments were <br />calculated based on the entire project area and not on the cost of each phase <br />of the project, some phases will cash flow while others may not. The balance <br />available from this phase may be used to cover a shortfall in another phase. <br /> <br />Action Requested <br /> <br />. <br /> <br />The City Council is asked to approve the attached resolution refunding Series <br />1994A improvement bonds issuing 1999B refunding bonds and defeasing <br />1994E improvement bonds. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br />