7.3. SR 11-02-2020 - Laserfiche WebLink

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Bank Qualification:The City’s 2020B Bonds are a current refunding of outstanding bond issues that were originally designated as bank qualified; therefore, only the portion of the 2020B Bonds that exceeds the principal being refunded counts towards the 2020 bank qualification limit. The amount of the Prior CIPBonds being refunded is $5,865,000and the estimated par amount of the 2020B Bonds is $5,970,000. The difference of $105,000isthe amount that countstowards the $10 million bank qualification limit.This amount will likely change based on resizing of the 2020BBonds on the day of sale. Excess Premium/Unused Discount:The pricing of the 2020B Bonds may produce an amount of original issue premium or unused allowance for underwriter compensation that causes the amount of bond proceeds to be in excess of what is required to effect the refunding transaction. Any amount of surplus proceeds will be used, to the extent possible, to reduce the principalamount of the 2020B Bonds and the underwriter compensation will be adjusted accordingly. $7,295,000 Taxable General Obligation Sewer Revenue Refunding Bonds, Series 2020C Description of Issue PURPOSE:Proceeds of the 2020C Bonds will be used to refund the February 1, 2023through February 1, 2035 maturities of the City’s General Obligation Sewer Revenue Bonds, Series 2014B, dated August 21, 2014(the “2014B Bonds”). Proceeds of the 2014B Bonds were originally issued to financea wastewater facility improvement project. AUTHORITY: Statutory Authority:The Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 444. Statutory Authority: Pursuant to Minnesota Statutes, Chapter 444 and the resolution awardingthe 2020C Bonds, the City will covenant to maintainutility fees andcharges sufficient to generate revenues to support the operation of the City’s Sewer Utility Fund and pay debt serviceon all bonds payable from the sewer utility including the 2020C Bonds.The City is required to annually review the budget for the Sewer Utility Fund to determine whether current rates and charges are sufficient and to adjust them as necessary. SECURITY ANDThe 2020C Bonds are ageneral obligation of the City, secured by its full faith and credit and taxing power. Principal and interest payments on the 2020C Bonds will be repaid SOURCE OF from net revenues of the Sewer UtilityFund. PAYMENT: On February 1, 2022, the redemption date of the 2014B Bonds, proceeds of the 2020CBonds will be used to redeem the outstanding principal of the 2014B Bonds in the amount of $7,040,000. The City will be required to make its regularly scheduled debt service payments on the 2014B Bonds from available Sewer Utility revenuesto and including the redemption date of the 2014B Bonds.Beginning with the August 1, 2022interest payment, the City will begin making debt service payments on the 2020CBonds, realizing interest cost savings. Page 6