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<br /> <br />A.( -\.( <br />( II <br />IIi( River <br /> <br />ITEM 3.1. & 3.2. <br /> <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />MAYOR & CITY COUNCIL <br /> <br />DATE: <br /> <br />LORI JOHNSON, FINANCE DIRECTOR <br /> <br />NOVEMBER 28, 1994 <br /> <br />SUBJECT: RESOLUTION PROVIDING FOR THE <br />ISSUANCE AND SALE OF THE CITY'S <br />$1,010,000 GENERAL OBLIGATION <br />WATER REVENUE BOND, SERIES <br />1994D; AND RESOLUTION PROVIDING <br />FOR THE ISSUANCE AND SALE OF <br />THE CITY'S $1,550,000 GENERAL <br />OBLIGATION IMPROVEMENT BOND, <br />SERIES 1994E <br /> <br />FROM: <br /> <br />e <br /> <br />Bids for the above-mentioned bond issues will be received by Springsted at <br />their offices until1l:00 a.m., Monday, November 28. Dave McGillivray of <br />Springsted will be present at Monday night's meeting to present the results <br />of the bids and recommend the award. The Council is asked to approve the <br />two resolutions attached in order to award the bid. <br /> <br />As you know, interest rates have increased. Unfortunately, for several <br />reasons, the City was not able to speed up the timeline on these bond issues <br />to allow for the award prior to the recent tightening by the Fed. It was <br />originally anticipated that the interest rate for the improvement bonds would <br />be around 6 percent. Therefore, the interest rate on the special assessments <br />was set at 7.5 percent. Even if the interest rate of the bonds exceeds 6 <br />percent, the City cannot increase the interest amount charged on the <br />assessments. The City typically charges 1.5 percent above the amount of the <br />bonds in order to offset expenses incurred for deferred and delinquent <br />assessments. <br /> <br />e <br /> <br />I have also attached a copy of the City's most recent Official Statement for <br />your review. The Official Statement summarizes the financial and economic <br />picture of the City as well as incorporating overlapping debt information from <br />both the County and School District and other economic and demographic <br />information pertinent to our area. Based on this information and other <br />information from the City, Moody's will rate the two bond issues. It is <br />anticipated that the rating will be Baal which is consistent with the City's <br />past rating. As we have discussed previously, it is unlikely that this rating <br />will change due to the large amount of school debt outstanding. <br /> <br />P.O. Box 490 . 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />