6.4A & 6.4B SR 11-07-1994 - Laserfiche WebLink

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City of Elk River, Minnesota November 3, 1994 e Appendix III sets forth the projections of assessment income for the City's Western Area Phase II. The City has considered assessing $1,512,129, of which $97,198 is either being deleted or under further review by the City. This process leaves $1,405,129 of gross assessments, of which $81,948 is to come from trunk lateral credit. The net assessable amount is therefore $1,323,181. These assessments will be filed in even annual installments of principal over a 15- year term with interest charged at a rate approximately 1.5% above the rate received on the bonds. For purposes of these projections, we have used an estimated assessment rate of 7.5%. e The assessments are expected to be filed on or before December 1, 1994 and interest on the assessments will begin accruing on that date. We understand the first collection of the assessments will be in 1995. Based on these assumptions, the projected assessment income for the City's Western Area Phase II is shown in Appendix III. Appendix IV is the recommended maturity schedule for the Series 1994E Bonds. We recommend these bonds mature February 1, 1996 through 2010 as shown in Column 3. The issue has been structured to best fit the projected assessment collections and provides for an even net annual requirement as shown in Co.lumn 9. These bonds will be secured by the City's general obligation taxing authority in addition to the special assessments being pledged. The assessment income developed in Appendix III is shown in Column 8. We understand the City intends to use MSA project funds to cover any shortfall. The estimated annual debt service estimates annual net requirements at the statutorily required 105% of debt service. As with all improvement issues, the timing of principal repayment assumes that assessments will be filed and collected in the years and amounts estimated. Any significant deviation from these assumptions may result in a cash shortfall. The first payment on the Improvement Bonds will be an interest payment due August 1, 1995. The 1995 first-half collections of assessments will be used to cover the August 1 interest payment due and second-half assessment collections, as well as surplus first-half collections, will be used to make the subsequent February 1 principal and interest payment. Common to Both Issues Underwriter's Discount Included in each issue is an allowance for discount bidding, which provides the underwriters with all or a portion of their profit and/or working capital needed to remarket the bonds. The City has used this feature for its previous issues and we recommend its continued use here. Call Feature We also recommend that the bonds for each issue maturing in 2005 and longer be subject to prepayment as early as 2004 and thereafter without penalty. This call feature gives the City the flexibility to refund either of the issues in the future if circumstances so warrant or call a portion of the Improvement Bonds if prepayments are significant. Credit Rating e Included as part of the issuance costs for each issue is a proviSion for a rating from Moody's Investors Service of New York. The total Moody's rating fee will be pro-rated between the two issues. We will assist the City in providing the information needed by Moody's to conduct their rating analysis. Paoe 3