05-23-1994 CC MIN - Laserfiche WebLink

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Elk River City Council Meeting May 23, 1994 Page 2 e 3.2. Consider Resolution providina for the issuance and sale of the City's $3A95,000 G.O. Improvement Bonds, Series 1994A; Resolution providina for the issuance and sale of the City's $1.280,000 G.O. Sewer Revenue Bonds, Series 1994B; and, Resolution providina for the issuance and sale of the City's $1.080,000 G.O. Storm Sewer Revenue Bonds, Series 1994C Finance Director Lori Johnson provided an overview of the three bond issues that are before the City Council. These issues include a $3.495 million G.O. Bond for general development, a $1.28 million G.O. Sewer Revenue Bond for improvements to the treatment plant and a $1.08 million G.O. Storm Sewer Bond for city-wide storm sewer improvements. The Finance Director also provided an update on the cities credit rating and bond rating per information from Moody's. The Mayor discussed with the City Council the impact of the school debt on the City's bond rating. He indicated that the City's financial picture is improving annually, but the City's bond rating is not likely to change due to the high overlapping debt that is typical for a growing school district. The City financial consultant from Springsted, David Drown, explained how Moody's goes about rating communities and the factors that Moody's evaluates in establishing a City's bond rating. e David Drown distributed a handout of the results of the bond sales. David indicated that there are eight bids for the $3.495 G.O. Bond and the lowest bid was from Piper Jaffrey, Inc. There were four bids for the $1.28 Sewer Revenue Bonds with Cronin and Company being the low bidder. There were four bids for the $1 .08 Storm Sewer Revenue Bond and Cronin and Company was again the low bidder. All of the bids were lower than the original estimate and the rates were between 5.51 and 5.69 percent true interest rate. Additionally, David indicated that the bonds include insurance and this is a good indication that the City is deemed to be a good risk in the bond market. A brief discussion took place regarding the library project and the finances for this project. It was indicated that the City can anticipate a true interest rate of about 6 percent for this project. COUNCILMEMBER FARBER MOVED TO APPROVE RESOLUTION 94-55, A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $3.495 MILLION GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 1994A. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER HOLMGREN MOVED TO APPROVE RESOLUTION 94-56, A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $1.28 MILLION GENERAL OBLIGATION SEWER REVENUE BOND, SERIES 1994B. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. e COUNCILMEMBER FARBER MOVED TO APPROVE RESOLUTION 94-57, A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF THE CITY'S $1.08 MILLION GENERAL OBLIGATION STORM SEWER REVENUE BOND, SERIES 1994C. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0.