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I)IP <br /> Elk River <br /> Municipal Utilities <br /> 13069 Orono Parkway phone: 763.441.2020 <br /> Elk River, MN 55330 Fax.763 4418099 <br /> ' September 7, 2005 <br /> To: Elk River Municipal Utilities Commission <br /> ' From: Bryan Adams <br /> Subject: Proposed Electric Bond Issue <br /> As we have discussed previously, the Elk River Municipal Utilities will need to issue <br /> electric bonds to fund some of our capital projects in 2006. Preliminary analysis indicates <br /> a bond size of$3.5 to $4.0 million. We have two options to satisfy our bonding needs. <br /> ' They are using conventional electric revenue bonds or MMUA's Midwest Consortium of <br /> Municipal Utilities (MCMU) bond pool. We will require bond funds by early l s` quarter <br /> 2006. <br /> • Anthony Hedlof of the Midwest Consortium of Municipal Utilities will make a <br /> presentation of our meeting addressing what MCMU can offer. Theoretically, they should <br /> ' have fewer costs due to: <br /> a) Smaller issuing costs due to larger bond size ($50,000,000). <br /> ' b) Less interest costs due to MCMU utilizing variable rates, although we can <br /> lock our rates in at a fixed rate. <br /> c) We may not be requested to carry 10% reserve bond coverage. This will <br /> be verified. <br /> Attached is the following information for your review. <br /> ' 1) Conventional bonding alternative summary from Ehler's & Associates. <br /> Total principal and interest cost projected at $4,982,499.17 <br /> ' 2) MCMU bonding pool alternative. Total principal and interest cost <br /> projected at $4,661,954. <br /> 3) List of current participants in the Midwest Consortium of Municipal <br /> Utilities (MCMU). <br />