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<br /> <br />REQUEST FOR ACTION <br /> <br />To <br />Citv Council <br />Agenda Section <br />Administration <br />Item Description <br />Resolution Awarding the Sale of the City's $300,500 General <br />Obligation Equipment Certificate, series 2007B; Fixing its Form <br />and Specifications; Directing its Execution and Delivery; and <br />Providin for its Pa ment. <br /> <br />Meeting Date <br />Ma 7,2007 <br /> <br />Item Number <br />5.l. <br />Prepared by <br />Tim Simon, Finance Director <br />Reviewed by <br />Lori ohnson, Ci Administrator <br />Reviewed by <br /> <br /> <br />Action Requested <br />The City Council is asked to approve the resolution awarding the sale of the City's $300,500 general <br />obligation equipmenr certificate, series 2007B; fixing irs form and specifications; directing its execution <br />and delivery; and providing for its payment. <br /> <br />Background/Discussion <br />The 2007 budget includes expenditures of $300,500 for police and fire equipment to be financed through <br />equipment certificates. The tax levy for taxes payable in 2007 includes a levy of$120,000 for the first <br />year's principal and interest on the equipment certificate. The Bank of Elk River is purchasing the <br />certificate for a three-year term at an interest rate of 5.20 percent per annum. The interest rate is slighrly <br />higher this year due to the fact that the city intends to issue more than $10,000,000 in calendar year 2007, <br />mainly due to the YMCA. As a result, the bonds will not be bank qualified which means they carry a <br />higher interest rate and will be taxable to the bank. The purchases authorized with equipment certificate <br />proceeds include three police cars and a tanker truck for the fire department. <br /> <br />Financial Impact <br /> <br />Issuance of the certificate requires annual tax levies in an amount sufficient to pay the principal and <br />interes t on the certificate. <br /> <br />Attachments <br />. Resolution awarding the sale of the city's $300,500 general obligation equipment certificate series <br />2007B; fixiug its form and specifications; directing its execution and delivery; and providing for its <br />payment. <br /> <br />Action <br /> <br />Motion by_ <br /> <br />Second by _ <br /> <br />Vote <br /> <br />Follow Up <br /> <br />s: \Council\Finance \2007BEquipmentCertificates.doc <br />