8.1. SR 01-21-2014 - Laserfiche WebLink

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City of Elk=' Request for Action River To Item Number Mayor and City Council 8.1 Agenda Section Meeting Date Prepared by General Business January 21, 2014 Tim Simon, Finance Director Item Description Reviewed by Issuance of$2,125,000 Electric Revenue Refunding Cal Portner, City Administrator Bonds, Series 2014A Reviewed by Action Requested Approve,by resolution,the issuance of Electric Revenue Refunding Bonds, and authorizing certain other actions to be taken by the Elk River Municipal Utilities Commission with respect to the issuance of Electric Revenue Refunding Bonds, Series 2014A. Background/Discussion As part of the debt monitoring process, our financial advisors and staff are continually evaluating the bond market to determine if it is feasible to refund existing bond issues. Elk River Municipal Utilities (ERMU) staff,with the guidance from their financial advisor, Springsted,has identified a refunding possibility with the 2006A Electric Revenue bonds. This series 2014A issue is a current refunding bond, in which the proceeds of the bonds are used to redeem the outstanding principal of the series 2006A bonds. These bonds will be repaid from the Electric Utility System. The city is the qualified entity to issue the bonds. On January 14, 2014, ERMU Commissioners adopted a resolution requesting the Council to approve the issuance of the refunding bonds. The structure of the refunding bonds is modified to be three years shorter than the remaining term of the original bonds. The original bonds would have matured on August 1, 2021. ERMU wants to be positioned for possible new bond issues related to the purchase power agreement with their new provider that will take effect in 2018. Schedule: January 14—Utilities Commission sets sale date and terms (approved) January 21 —City Council sets sale date and terms and authorizes Utility Commission to award the bonds January 27—Rating conference call February 11 —Bids received, commission action Financial Impact The bonds are not general obligations of the city but will be special limited obligations paid solely from the electric utility system. Estimated interest savings of the current refunding is approximately$202,222 or 6.89% net of issuance costs and a present value benefit of$166,732.40. True interest cost (TIC) is estimated to be 1.587% compared to the prior TIC of 3.947% on the 2006A bonds. Attachments • Springsted's summary of refunding bond issuance • Resolution P a w E A E U s r NaA f RE]