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<br />rll ---'\) <br />( )j <br />tit{ <br /> <br /> <br />Item #5.1. <br /> <br />River <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />Mayor & City Council <br /> <br />-A~ <br /> <br />FROM: <br /> <br />Lori Johnson, Finance Director <br /> <br />DATE: <br /> <br />May 10, 1999 <br /> <br />SUBJECT: Resolution Providing for the Sale of the <br />City's $5,725,000 General Obligation <br />Bonds, Series 1999A <br /> <br />. <br /> <br />Attached are the Recommendations and resolution related to issuing <br />$5,725,000 of general obligation improvement bonds for the East Elk River <br />Water and Sewer Improvement Project which is currently underway. The <br />resolution calls for setting the sale for June 28 so that bond proceeds will be <br />available some time in July. This bond issue does not include funds for any <br />street or storm sewer project costs. Those will be included in a future bond <br />Issue. <br /> <br />The water and sewer project costs to be financed total $6,080,821. This <br />includes construction, engineering, bond issuance, and other related overhead <br />costs, excluding capitalized interest which is necessary because special <br />assessment payments will not be received until July 2000. These bonds are <br />being financed through several sources including revenues from Tax <br />Increment Financing District 19, water and sewer fund contributions, and <br />primarily, special assessments. The water fund has chosen to make a portion <br />of its contribution up-front, thereby reducing the bond issue size and reducing <br />the interest cost. This $500,000 up-front contribution reduces the total bond <br />issue to $5,725,000. Please refer to Page 7 of the Recommendations for <br />additional information on the project costs and sources of revenues. <br /> <br />This is a general obligation bond which means that the city has authority and <br />an obligation to levy property taxes if the other sources of revenue do not meet <br />debt service. Although the bond documents require the certification of a tax <br />levy, at this time it is expected that many, if not all, of the levies will be <br />canceled. Cancellation of the levies will depend on the flow and timing of <br />revenues. <br /> <br />. <br /> <br />This bond issue has been structured based on numerous assumptions; the <br />assumptions are necessary as not all of the final revenue amounts and timing <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 . TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br />