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Home My WebLink About6.e. Discussion on Upcoming Bond Issuesj: CITY OF ROSEMOUNT EXECUTIVE SUMKARY FOR ACTION CITY COUNCIL MEETING DTE: October 6, 1992 AGENDA ITEM: AGENDA SECTION: Discussion on Upcoming Bond Issues New Business PREPARED BY: AGE1,1D1 {j /¢ �Ye # 6 E Jeff May, Finance Director ATTACH -LENTS: Memo, Draft Financing Schedules APP40VEZAY: C This item is on the agenda for discussion regarding the upcoming bond issues we are in the process of scheduling. There will be three bond issues 1) General Obligation Community Center Bonds, Series 1992C 2) General Obligation Improvement Bonds, Series 1992D 3) General Obli ation Municipal Building Bonds, Series 1992E The first issue is related to the items approved by referendum in February of 1991, the 'banquet facility and the theatre. The second issue concerns public improvement projects within the city. The third issue is related to the Port Authority issue, which contains the debt to be issued forthemultipurpose arena, the Highway 3 business relocations and the cost overruns on the banquet facility and theatre. The attached memo will explain some of the problems that have arisen because of the complexities of these bond issues, especially the Series 1992C and Series 1992E issues. RECOhZ1ENDED ACTION: None at this time. COUNCIL ACTION: L }. J PHONE (612) 423-4411 FAX (612) 4235203 DATE: October TO: FROM: iii of Rosemount 2875 - 145th Street West, Rosemount, Minnesota MAYOR Mailing Address: Edward B. McMenomy P.O. Box 510, Rosemount, Minnesota 55068.0510 COUNCILMEMBERS Sheila Klassen James (Red) Staats Harry Willcox Dennis Wippermann 1, 1992 ADMINISTRATOR Stephan Jilk Mayor M Menomy Council Members Klassen, Staats, Willcox & Wippermann Jeff Mai, Finance Director SUBJECT: Upcoming Bond Issues As explained in the accompanying green sheet, this matter pertains to the issues that are confronting us as we are preparing to issue debt for a number of projects, most notably the National Guard Armory and all of its enhancements. The debt will be issued in three separate issues, two issued by the City and one issued th ough the Port Authority. The three issues are as follows: 1) General Obliation Community Center Bonds, Series 1992C 2) General Obli ation Improvement Bonds, Series 1992D 3) General Obli ation Municipal Building Bonds, Series 1992E Issues (1) & (2) will be issued by the City and (3) will be issued by the Port Authority. The Series 1992D issue is for public improvement projects. This is a fairly straightforward issue which consists of the following projects: (1) Project 232 - O'Leary's Hills 5th Addition; (2) Project 233 - Section 31 Trunk Sanitary Sewer Improvements Project; (3) Project 234 - Shannon Hills 4th Addition; and (4) Project 237 - National Guard Armory Water Improvements Project. All four of these projects qualify as statute 429 projects, which means that at least 200-. of the total project costs will be assessed. The balance of the amounts to be fin nced will be recovered through the core funds. The complexities of the other two issues, the Series 1992C and the Series 1992E 'ssues, are the driving reasons behind the delays in the requests for authorization for issuance for these bonds. Originally, the authorization for issuance was scheduled for September 29th. It was then pushed back to October 6th, and has now been push d back to October 13th. Series 1992C is the debt to be issued for the enhancements to the banquet facility and the theatre for the Armory. This funding was approved by a referendum vote in February of 1991. In itself, this would be a fairly routine issue that would be recovered through levies. As you are all aware, the bids for this project came in significantly higher than anticipated, some tug s �oming `UCS gosemouvdP Page 2 $554,000 higher. 7 overruns as part of Port Authority wou] facilities and the Port Authority thrc special Armory lev: These two levies, c $95,000 a year and a percentage of the for 1992), are prii portion of the bas: National Guard. Bi Armory portion of for our annual pays approximately $35, lease payments to Series 1992E issue issuance and disco rate, the $35,000 Further compoundin part of our regula lease payments to General Obligation up front to reduce back at the $35,00 amount will be bet The other two port relocations of the to the Armory site arena. The reloca increment dollars The multipurpose a the operations of problems with this The last area of c supposed to be inc debt issue that wE levies. This amoi furnishings, the c city share of the Armory. Due to ai this amount in wii fund these dollar; amount for the sai $554,000 cost ove: Therefore, we wil: his problem was dealt with by issuing the cost the Port Authority debt, Series 1992E. The d then lease back to the City the two City would make those lease payments to the ugh the excess funds available from the two es available. ne enacted by State special legislation for the other through an existing statute based on City's total valuation(approximately $30,000 .arily in place to make the City's 12.501 c Armory project being funded through the cause of the lower bids received on the basic he project, only about $90,000 will be needed lent to the National Guard. This frees up 00 to be utilized by the City to make the he Port Authority for that portion of the The only problem is, that after adding Lnt costs and using a conservative interest rill not be sufficient to cover those payments. r this is the fact that we cannot include as budget or tax levy an amount to include for :he Port Authority and still issue the debt as debt. Therefore, we must buy down or put cash the $554,000 to an amount that can be leased a year. We are estimating that this buy down leen $50,000 and $150,000. ons of the Series 1992E issue are for the businesses along Highway 3 that are adjacent and for the construction of a multipurpose ion debt amount will be repaid through tax .nd there seems to be no problems with this. 'ena debt will be repaid through revenues from .he facility. Here again, there seems to be no part of the debt issue. oncern regards an amount of $253,000 that was luded by the National Guard as part of their would have repaid through those two Armory nt included costs for site improvements, ity share of the Highway 3 improvements and the water utility improvements regarding the oversight, the National Guard did not include h their bond bids and thus, we will have to . We will not be able to issue debt for this .e reasons as explained in regards to the runs on the Community Center project. have to fund this amount upfront as well. Page 3 This being the casE $300,000 and $400,( schedules, run by f $408,620. We are i this draft number i significant amount, different options bottom line is that the project now. work. I would like to ma that is regarding by Moody's via tel them for rating. it is the recommen consultants, that with Moody's to gi, project. Dan O'Ne in October for ano and felt that it m interview with Moo assist us in our p to at Springsteds great advantage to project and the gr Rosemount. We wou Council meeting Tu we will need to fund somewhere between 00 from cash reserves of the City.The attached pringsteds(DRAFT ONLY), show the figure to be orking with different figures and feel that ill be able to be reduced by a fairly By Tuesday night, we should have some s to where these funds may be drawn from. The we have approved the contract and cannot stop 'herefore, we must find a way to make this e one last comment about these bond issues and ur bond rating. Normally, we are interviewed phone in regards to bond issues placed before ecause of the complexity of the Armory issues, ation of Springsteds, our financial e set up a formal person to person interview e them a total presentation of the Armory 11, our consultant will be in New York later her organization's presentation before Moody's y be appropriate to try and arrange an y's during that week so he would be present to esentation. All of the people we have talked n this matter concur that it would be to our be able to explain, in person, the Armory at impact it will have on the City of d like to discuss your feelings on this at the sday night as well. If you have any qu stions before the meeting, do not hesitate to call Steve or mysef so we can have discussion go as smoothly as possible on Tuesda night. 1,0/01/92 08:18 FA 612 223 3002 City of Rosemount, Minnelsota Summary of Port Authori issue ICE ARENA PORTION Project Costs Capitalized Interest Costs of Issuance Allowance for Discount Less: Investment Earnings Total Ice Arena Portion RELOCATION PORTION Project Costs Costs of Issuance Allowance for Discount Less: Investment Earnings Total Relocation Portion LEASE BACK PORTION Auditorium/Banquet Costs Site/Highway/Water Improvem & Furnishings Less: City Cash Contribution Net Project Costs Costs of Issuance Allowance for Discount Total Lease Back Portion TOTAL PORT AUTHORITY BOI nts D ISSUE SPRINGSTED INC. Q002/006 Prepared 10/01/92 By SPRINGSTED Incorporated 2,127,000 DRAFT173,700 19,760 40,120 (580) 600,000 6,020 10,455 1 475 554,000 253,000 (408,620)* 396,380 4,650 6,970 2,360,000 616,000 410,000 * * 3,385=0 000 * Includes investment earnings on net bond proceeds the City may accrue during construction. .0 * Represents amount of bonding, including the State mandated 5% overlevy, which can be supported with annnul revenues of $35,000. ],0/01/92 08:19 FAX 612 223 3002 SPRINGSTED INC. Z003/006 City of Rosawunt, Minnesota Prepared September 30, 1982 G.O. Yunicpal Building Bonds, series 1892E By SPRINGSTED Incorporated Total Port Authority Issue Dated: 11. 1.1692 Mature: 2- 1 DRAFT First Interest: 8- 1-1983 Total Capital- Not Year of Year of Principal axed Levy tosyl Levy unt. Principal Rates Interest t Interest Interest Required of Total (1) (2) (3) (4) (5) (6) (7) (e) (9) 1992 1984 76,000 3.20 ,434 308,434 173,700 134,734 141,471 1893 1995 110,000 3.50% IE4,347 294,347 0 294,347 309,084 1994 lase 120,000 3.80% 14,407 300,497 0 300,497 315,522 1995 1997 135,000 4.10% 11,937 310,937 0 310,937 326,484 1986 1988 165,000 4.30% 1'0,402 335,402 0 335,402 352,172 1997 1899 175,000 4.509s 1 L3,307 338,307 0 338,307 355,222 1898 2000 55,000 4.7096 1 4,432 210,432 0 210,432 220,954 1899 2001 65,000 4.90% 152,847 217,847 0 217,847 228,739 2000 2002 70,000 5.10% 149,882 219,882 0 219,662 230,645 2001 - 2003 85,000 5.25% 148,092 231.092 0 231,092 242,847 2002 2004 9S,000 5.40% i 1,829 238,629 0 236,629 248,460 2003 2005 106,000 5.55% 1,499 241,499 0 241,499 253,574 2004 2006 110,000 6.70% 1 ,671 240,871 0 240,871 252,705 2005 2007 115,000 5.854 1 4,401 239,401 0 239,401 251,371 2008 2008 125,000 6.00% 1 7,673 242,673 0 242,673 254,807 2007 2009 135,000 6.10% 1 0,173 245,173 0 245,173 257,432 2003 2010 140,000 6.10% 1 1,938 241,938 0 241,938 254,035 2008 2011 150,000 8.15% 3,368 243,198 0 243,398 255,588 2010 2012 180,000 6.1546 4,173 244,173 0 244,173 256,382 2011 2013 170,000 6.155s 4,333 244,333 0 244,333 256,550 2012 2014 180,000 6.20% 4878 243,878 0 243,878 258,072 2013 2015 190,000 6.20% 2,718 242,716 0 242,718 254,854 2014 2018 206,000 6.25% 0,938 245,938 0 245,938 2$8,235 2015 2017 220,000 6.26% 8,125 249,125 0 248,126 260,531 2016 2018 230,000 8.25% 4,375 244,375 0 244,375 258,594 TOTALS: 3,385,000 3,0 8,679 6,411,879 173,700 6,238,170 8,550,000 Bond Years: 50.906.25 Annual In crest: 3,028,879 AVG. maturity: IS.04 Plus Discount: 67,646 AVO. Annual Rete: 5.94M Net Inteest: 3,084,424 T.I.C. Rate: 6.0484 N.L.C. R ts: 8.058% Interest rates are estl®ates; changes May cause significant alterations of this schedule. The actual underwriter's discount bid may also vary. .10/01/92 08:19 FAX 612 223 3002 SPRINGSTED INC. Avg. Annual Rate: 8.04756 Q004/006 City of Rosemount, Minnesota 2,587,680 T.I.C. Rate: 8.18540 N.I.C. R to: Prepared September 30, 1892 G.O. Munlcpal Building Bonds, Series tae E By 9PRINOSTEO Incorporated Ice Arena Portion Dated: 11- 1-1892 DRAFTMature: 2- 1 First Interest: S. 1-1993 Total capital- Net Year of Year of Principal lzed Levy ion Levy Yat. Principal Rates Interest d, Interest Interest Required of Total (1) (2) (3) (4) (5) (B) (7) (6) (8) 1992 1994 0 0.00% 173,700 173,700 173,700 0 0 1993 1996 10,000 3.50% 1 ,980 148,960 0 148,960 158,408 1894 1998 15,000 3.60% 134,610 153,610 0 153,810 181,291 1995 1997 20,000 4.1086 138,040 168,040 0 158,040 165,942 1856 1988 30,000 4.30% 137,220 167,220 0 187,220 175,581 1997 1999 35,000 4.60% 1 ,930 170,930 0 170,930 179,477 1998 2000 45,000 4.70% 1 ,355 179,356 0 179,355 188,323 1999 2001 55,000 4.90% 1 ,240 187,240 0 187,240 196,602 2000 2002 60,000 5.10% 1 9,545 189,545 0 159,545 198,022 2001 2003 70,000 5.25% 1 8,485 196,485 0 198,485 208,309 2002 2004 80,000 5.40% 1 ,810 202,810 0 202,810 2121951 2003 2005 90,000 5.66% 1 8,400 208,490 0 208,490 218,915 2004 2008 95,000 5.7096 1 3,495 208,495 0 208,495 21a,920 200S 2007 100,000 .5.85% 1 8,090 208,080 0 208,080 218,484 2008 2008 110,000 8.0046 1 12,230 212.230 0 212,230 222,842 2007 2009 115,000 0.1M 15,830 210,830 0 210,630 221,162 2008 2010 120,000 6.10% 8,615 208,816 0 208,815 219,046 2009 2011 130,000 6.1590 1.295 211,295 0 211,295 221,860 2010 2012 140,000 8.1551 73,300 213,300 0 213,300 223,865 2011 2013 150,000 8.16% ,890 214,690 0 214,690 225,425 2012 2014 156,000 6.20% 5,465 210,485 0 210,465 220,888 2013 2015 185,000 8.20% 5,855 210,855 0 210,855 221,398 2014 2016 180,000 6.2591 5,825 215,625 0 215,825 228,406 2015 2017 190,000 6.25% 24,375 214,375 0 214,375 225,094 2016 2018 200,000 8.2596 12,500 212,500 0 212,500 223,125 TOTALS: 2,360,000 2, 27,540 4,887,540 173,700 4,713,840 4,940,539 Bond Years: 41,800.00 Annual I terest: 2,827,840 Avg. Maturity: _ 17_.71 Plus Ois ount: 40,120 Avg. Annual Rate: 8.04756 Net Into eat: 2,587,680 T.I.C. Rate: 8.18540 N.I.C. R to: 6.143% Interest rates are estimates; changes m y cause significant alterations of this schedule. The actual underwriter's discount bid y also vary. City or Rosemount, Minnesota Annual Interest: 109,725 Avg. Maturity: 4.09 Plus Discount: 10,455 Avg. Annual Rate: Prepared September 30, 1902 Not Interest: G.O. Municipal Building Bonds, Series 1992E 4.BiB% N.I.C. Rate: 4.781% By SPRIH03TED Incorporated c Relocation Portion DRAFT r m Dated: it- 1-1992 no Mature: 2- 1 0 First Interest: 8. 1-1993 00 Total 1988 Projected Projected H: Year of Year of Principal 105% Bond Total Increment So Robt Total Cumulative °O Levy Mat. Principal Rates Interest i Interest of Total Issue Debt Income Lease Inc Income Surplus (1) (2) (3) (4) (5) (6) (7) 1991 1993 0 0.00% 6,440 6,440 6,762 175,265 182,047 405,000 06,000 501,000 310,853 N 1992 1994 70,DDD 3.40% 25,760 95,76D 100,548 171,735 272,263 405,000,870 -� ro 1993 1995 90,060 3.709, 23,380 113,38D 119,049 172,635 291,664 405,000 120,000 525,000 780,966 1994 1986 05,00D 4.00% 2D,050 115,05D 120,803 172,515 203,316 405,DDD 120,000 525,000 1,012,668 C> 0 1995 1897 105,000, 4.30% 16,250 121,25D ;• 127,313 171,355 208,060 405,DDD 122,000 527,000 1,241,ODD o N 1908 1998 125,OOD 4.50% 11,735 136,735 143,572 174,135 317,707 405,ODD 144,000 $40,000 1,472,283 1907 1988 130,000 4.70% 6,110 136,110 142,916 175,360 318,276 4051DOD 144,000 549,000 1,703,017 TOTALS: 615,000 109,725 724,725 760,963 1,213,020 1,873,983 2,835,000 842,000 3,677,ODD Bond Years: 2,513.75 Annual Interest: 109,725 Avg. Maturity: 4.09 Plus Discount: 10,455 Avg. Annual Rate: 4.3651, Not Interest: 120,180 T.I.C. Rate: 4.BiB% N.I.C. Rate: 4.781% Interest rates are estimates; changes may cause significant alterations of this schedule. The actual underwriter's discount bid may also very. DRAFT 2 0 0 0 0 0 1.0/01/92 08:20 FAX 612 220 0002 SPRINGSTED INC. City of Rosemount, Minnesota Prepared September 30, 1992 G.O. Municpal Building Bonds, Series 1992E By SPRINGSTED Incorporated Community Center Lease Portio Dated: 11- 1-1992 Mature: 2- 1 First Interest: 8- 1-1993 Year of Year of Levy flat. Principal ates (1) (2) (3) (4) Total Principal 105% Interest & Interest of Total (5) (6) (7) 1992 1994 5,000 3.20% 29,071 34,071 35,775 1993 1995 10,000 3.50% 23,097 33,097 34,752 1994 1996 10,000 3.80% 22,747 32,747 34,384 1995 1997 101000 4.10% 22,367 32,367 332985 1996 1998 10,000 4.30% 21,957 31,957 33,555 1997 1999 10,000 4.50% 21,527 31,527 33,103 1998 2000 10,000 4.70% 21,077 31,077 32,631 1999 2001 10,000 4.90% 20,607 30,607 32,137 2000 2002 103000 5.10% 203117 30,117 313623 2001 2003 151000 5.25%' 19,607 34,607 36,337 2002 2004 15,000 5.40966 18,819 331819 35,510 2003 2005 15,000 5.5586 183009 33,009 341659 2004 2006 15,000 5.70% 17,176 32,176 33,785 2005 2007 15,000 5.85% 15,321 31,321 32,887 2006 2008 15,000 6.00% 15,443 302443 31,965 2007 2009 20,000 6.10% 14,543 34,543 36,270 2008 2010 20,000 6.10% 133323 33,323 343989 2009 2011 20,000 6.15% 12,103 32,103 33,708 2010 2012 201000 6.15% 10,873 30,873 32,417 2011 2013 20,000 6.15% 9,643 29,643 31,125 2012 2014 25,000 6.20% 8,413 33,413 35,084 2013 2015 25,000 6.20% 6,863 31,863 33,456 2014 2016 25,000 6.25%s 53313 30,313 31,829 2015 2017 303000 5.25% 3,750 33,750 35,438 2016 2018 30,000 6.25% 1,875 31,875 33,469 TOTALS: 410,000 394,641 8041641 844,873 Bond Years: 63592.50 Annual Interest: 394,641 Avg. Maturity: 16.08 Plus Discount: 6,970 Avg. Annual Rate: 5.986% Net Interest: 401,611 T.I.C.-Rate: 6.095% N.I.C. Rate: 6.092 Interest rates are estimates; changes may cause significant alterations of this sched le. The actual underwriter's dis ount bid may also vary. A F i Z 006!006