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Interest rates for the taxable municipal market are quoted as a spread to U.S. Treasury <br />Securities. To give you an indication of the relative position of that market, the chart <br />below tracks the yield of the 10-year and 30-year U.S. Treasury over the last five years: <br />RISKS/SPECIALThe outcome of thesefinancingswill rely on the market conditions at the time of the <br />sale. Any projections included herein are estimates based on current market conditions. <br />CONSIDERATIONS: <br />$9,895,000 General Obligation Capital Improvement Plan Bonds, Series 2020A <br />Description of Issue <br />PURPOSE:Proceeds of the 2020ABonds will be used tofinance various capital improvements <br />identified in the City’s 2020-2025 Capital Improvement Plan(CIP), to beadopted <br />November 2, 2020.Specifically, the City expects to use proceeds of the 2020A Bonds <br />to finance anexpansionof the Public Safety Building and a portion of the City’s Fire <br />Station #3.The projects will include an expansionof the indoor parking garage for the <br />Police Department and an expansion and upgrade of the Fire Station personnel support <br />spaces and training room.TheCity expects to issue additional CIP bonds in 2021 to <br />finance the remainder of Fire Station #3. <br />The amount of proceeds from the 2020A Bonds available for financing the construction <br />of the City’s Fire Station #3 will be dependent on the final sizing of the 2020A Bonds <br />and the 2020B Bonds on the day of sale and consideration of the $10 million bank <br />qualification limit as discussed below.The City has determined to keep the borrowing <br />amount of the 2020A Bonds such that they can be designated as bank qualified. <br />Generally, interest rates on bank qualified tax-exemptbonds are lower than tax exempt <br />bonds that are not bank qualified. <br />AUTHORITY: <br />Statutory Authority:The 2020ABonds are being issued pursuant to Minnesota <br />Statutes, Section 475.521, and the City’s 2020-2025Capital Improvement Plan, to be <br />adopted onNovember 2, 2020.The resolution under consideration approving the <br />issuance of the 2020A Bonds specifies that the issuance of CIP bonds cannot exceed <br />Page 2 <br />