Laserfiche WebLink
<br />Elk River ~ <br />Municipal Utilities <br /> <br />13069 Orono Parkway <br />Elk River, MN 55330 <br /> <br /> <br />phone: 763.441.2020 <br />Fax: 763.441.8099 <br /> <br />December 6, 2005 <br /> <br />To: Mayor and City Council <br /> <br />From: Bryan Adams <br /> <br />Subject: 2006 Elk River Municipal Utility Revenue Bonds <br /> <br />The Elk River Municipal Utilities continues to experience large electric growth in our <br />~:ervice territory. The 2006 ERMU electric capital budget is approximately $5,000,000 of <br />which $3,500,000 is to be financed through revenue bonds. The projects to be funded <br />with bonds are as follows: <br /> <br />I) Expansion of West substation (next to street dept garages) vvith a larger <br />transformer. $430,000 <br />2) Construct new substation in Otsego. $380,000 <br />3) Construct new substation at station 14 (by (iRE). $800,000 <br />4) Construct feeder to serve Target. $825.000 <br />5) Construct 3 feeders in Otsego. $400.000 <br />6) Continue construction of new feeder to Elk Path business Parle $200.000 <br />7) Other feeder construction or relocation. $465,000 <br /> <br />There are two sources of bonding available to us. There is the conventional bonding <br />utilized by the city of either revenue bonds or general obligation. The other option is to <br />utilize Minnesota Municipal Utilities Association (MMUA) bond pool which is titled <br />Midwest Consortium of Municipal Utilities (MCMlJ) which utilizes either fixed rate or <br />variable rate financing with revenue pledge. MCMLJ recently secured $50,000,000 of <br />funds available as drawclown bonds. Attached is a proposed 'resolution allowing the <br />ERMU to utilize the MCMU funding. <br /> <br />The Elk Rjver IVlunicipal Utilities ('ollllnission I~; recommending the iVICMU financing <br />pooL althouEh not a unanimous decision. {iJr the 1'o]lowlnlI reasons: <br />. 'n. _ <br /> <br />!) The il1ltial issuance costs are less expensive and process of securing funds is <br />eaSIer. <br /> <br />2) The ongoing interest cost are projected to be less expensive depending on <br />