Laserfiche WebLink
,._.,y of <br /> <br />Item # 5.4. <br /> <br />MEMORANDUM <br /> <br />iver <br /> <br />TO: <br /> <br />FROM: <br /> <br />Mayor and City Council <br /> <br />Lori Johnson, Finance Director <br /> <br />DATE: <br /> <br />January 5, 1998 <br /> <br />SUBJECT: <br /> <br />Resolution Awarding the Sale of the <br />City's $225,000 General Obligation <br />Equipment Certificate of 1998; and <br />Fixing Form and Specifications; <br />Directing its Execution and Delivery; <br />and Providing for its Payment - (for the <br />Elk River Municipal Utilities) <br /> <br />In January, 1997, the Elk River Municipal Utilities Commission authorized <br />the purchase of a 69 KV transformer and requested that the city issue an <br />equipment certificate for its payment. The transformer is due to be delivered <br />next week, and in preparation, the necessary certificate documents have been <br />prepared. The Utilities does not have legal authority to issue equipment <br />certificates because a levy is required so City Council approval is necessary. <br /> <br />The Municipal Utilities selected First National Bank of Elk River to purchase <br />the $225,000 certificate at an interest rate of 4.68% and a final maturity of <br />August 1, 2002. The payment schedule for this certificate is somewhat <br />unique because the payments will actually come from electric revenues <br />rather than a tax levy. However, the certificate requires that taxes be levied <br />for the payment of principal and interest thereby delaying the first principal <br />payment until August 1, 1999, when the first scheduled tax levy, if actually <br />levied, would be available for payment. Because electric revenues will be <br />available for payment prior to that time, the bank has agreed to accept <br />principal pre-payments. <br /> <br />During budget discussions for taxes payable in 1999, the City Council will be <br />asked to eliminate the 1999 levy for this equipment certificate due to the <br />planned pre-payment of the certificate with electric revenues. All future <br />scheduled levies are planned to be eliminated as the Municipal Utilities will <br />make the payments. <br /> <br />Action Requested <br /> <br />The City Council is asked to approve the attached resolution awarding the <br />sale of $225,000 in General Obligation Equipment Certificates for the <br />purpose of funding the purchase of a 69 KV transformer. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />