Laserfiche WebLink
<br />Bank Qualification: The City expects to issue more than $10,000,000 in the calendar year 2007. <br />Therefore, the Bonds will not be bank qualified. The difference between non- <br />bank qualified and bank qualified debt is very small in today's marketplace. <br /> <br />Discussion Issues: A portion of the assessments are used to cover costs of issuance. The City is <br />assuming approximately 5% of the assessments will be prepaid, which reduces <br />the bond size. <br /> <br />Arbitrage Rebate: With increasing short~term investment rates, IRS rules regarding the amount of <br />interest that the City may earn on bond proceeds is more of a concern. Because <br />the issue is over $5,000,000, the City must spend proceeds according to an 18 <br />month or 2 year schedule to avoid rebating or repaying interest earned that is <br />more than the interest rate on the bonds. The excess interest earnings are known <br />as arbitrage. The City will also need to keep its debt service funds within IRS <br />parameters to avoid penalties on carrying too high of a balance during the life of <br />the issue. <br /> <br />Attachments: <br />Sources and Uses of Funds <br />Proposed Debt Service Schedule <br /> <br />Ehlers Contacts: <br />Financial Advisors: <br /> <br />Bond Analysts: <br /> <br />Mark Ruff (651) 697-8505 <br />Sid Inman (651) 697~8507 <br />Diana Lockard (651) 697-8534 <br />Debbie Holmes (651) 697-8536 <br />Connie Kuck (651) 697-8527 <br /> <br />Bond Sale Coordinator: <br /> <br />The Official Statement for this financing will be mailed to the Council Members at their home address for <br />review prior to the sale date. <br />