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<br />rei ---'\) <br />( )! <br />rlk <br /> <br />ITEM 4. 1. <br /> <br />FROM: <br /> <br />MAYOR & CITY COUNCIL ~ <br />LORI JOHNSON, FINANCE DIRECTOR~ <br /> <br /> <br />TO: <br /> <br />DATE: AUGUST 12, 1993 <br /> <br />SUBJECT: AUTHORIZING ISSUANCE AND SETTING <br />SALE DATE FOR 1993 IMPROVEMENT <br />BONDS <br /> <br />There are numerous public improvement projects being completed <br />by the City in 1993. As is past practice, the City will be <br />issuing General Obligation Improvement bonds to finance the <br />cost of the improvement projects. In addition, the water <br />utility is proceeding with the construction of a water tower <br />and the related well and treatment facilities. Water revenue <br />bonds will be issued to finance those improvements. The total <br />issue will be in the amount of $3,525,000, $2,400,000 for <br />special assessment improvement projects and $1,125,000 for <br />water revenue projects. <br /> <br />e <br /> <br />Special assessments are pledged to the repayment of the <br />improvement project debt; however, some of the assessments are <br />deferred and some are the City's responsibility. For that <br />reason, there are tax levies which may be due on this bond. <br />The bond has been structured so that the levies will not start <br />until taxes payable in 1998. Delaying the need for levies <br />until that time increases the interest costs on the bond by <br />approximately $120,000. Some assessments are being deferred <br />until other public utilities are available. It is hoped that <br />these will be available and that the assessments can be levied <br />prior to the need for a tax levy. If the property does not <br />develop within that timeframe, tax levies will be required. <br />The levies are quite substantial in the years 1998 through <br />2002, between $184,000 and $191,000. <br /> <br />It is important that the deferral of assessments be monitored <br />closely. As the City continues to expand public services, it <br />is sometimes necessary to defer certain assessments. The <br />Council needs to be aware that the debt service for financing <br />the project still needs to be paid in a timely fashion; this <br />may mean that taxes on all City property owners will need to be <br />levied in order to make the debt payments. This may also be <br />true when improvement projects have large portions of <br />assessments that are Green Acres deferred. If, prior to <br />issuance of debt, the amount and length of the deferred <br />assessments are known, the bond can be structured, to a limited <br />degree, to accommodate the expected revenue stream and, <br />hopefully, reduce or delay the levy requirement. <br /> <br />e <br /> <br />The water revenue portion of this bond will be financed by <br />future water connection and water access fees as well as water <br />rate revenue. Bill Birrenkott has provided estimated revenues <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />