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Home My WebLink About2010-11-03 PACKET 04.E.IN �*Wlll ITIEETING DATE 11/03/10 ffl. rel 101 MAI AGENDA ITEM # Y. 4F Robin Roland I COUNCIL ACTION REQUEST: Consider calling (paying off) two series (200213 and 2003B) General Obligaton Improvement Bonds on February 1, 201 STAFF RECOMMENDATION: Adopt resolution authorizing Ehlers Inc. to begin the process of calling the 2002B and 2003B General Obligation Improvement Bonds. 7-1 9 1 u'- G 9 12 4 I BUDGETED AMOUNT ACTUAL AMOUNT ADVISORY COMMISSION ACTION: DATE REVIEWED APPROVED DENIED ❑ PLANNING ❑ ❑ ❑ ❑ PUBLIC SAFETY ❑ ❑ ❑ ❑ PUBLIC WORKS ❑ ❑ PARKS AND RECREATION ❑ ❑ HUMAN SERVICES/RIGHTS ❑ ❑ ❑ ❑ ECONOMIC DEV. AUTHORITY ❑ ❑ ❑ ❑ ❑ ❑ ❑ 01j Z! ael :4 91, pleffllfflu A, Date r City o f C Finance ep. TO: Honorable Mayor and City Council Ryan Schroeder, City Administrator FROM: Robin Roland, Finance Director ;m "" #'..", DATE: October 26, 2010 r' SUBJECT: Call General Obligation Bonds, Series 2002B, dated October 2, 2002 Call General Obligation Bonds, Series 2003B, dated March 1, 2003 Introduction Staff is requesting that the City Council authorize calling the 2002B and 2003B General Obligation Bonds to provide for levy capacity in the 2012 through 2019 budgets. Discussion The 2002B and 2003B General Obligation Bonds were issued to fund the Thompson Grove pavement management project. The issues to be called are as follows: Year 2002B Principal 20038 Principal 2011 $205,000 210,000 2012 115,000 190,000 2013 135,000 150,000 2014 140,000 150,000 2015 460,000 430,000 2016 480,000 440,000 2017 495,000 480,000 2018 550,000 435,000 2019 350,000 450,000 Total $2,930,000 $2,935,000 If these bonds are called, the reduction in the scheduled debt levy for future years is as follows: Debt - vy Debt Levy .. �t 213 00 I ... + ICI II � * �., � �• �. �.. r � 421,600 804,400 2,768,200 4,87 400 Honorable Mayor, City Council, and Ryan Schroeder Page 2 of 2 Sufficient funds are available in the respective Debt Service Fund and in the Ck}S8d Debt Fund to pay for the C8UiOg of these bonds on February 1 2011. Since adoption of the 2003 General Fund Designation p0|{Cy, anoOUntS not designated in the E]eOen9| Fund are transferred out of the fund for Sp8CUiC purposes. One of those transfers is for future debt reduction and goes to the Closed Debt Fund. Over $1.8 million has accumulated in the Closed Debt Fund from these transfers since 2003. The bonds being called have outstanding interest coupons ranging from 3.4% to 4.15%. By contrast, 1- year CD's are earning approximately 0.25% and 5-year CD's are earning approximately 2.44%. Action Reguested Adopt the attached F8SU|uUDO authorizing Ehlers Inc., our financial advisors, to begin the pFOC8SS of calling the 2O02B and 20O3B General Obligation |nn Bonds. EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF COTTAGE GROVE, MINNESOTA HELD: November 3, 2010 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Cottage Grove, Washington County, Minnesota, was duly held at City Hall on November 3, 2010, at 7:30 p.m. for the purpose, in part, of authorizing the call of certain outstanding General Obligation Improvement Bonds, Series 2002B and General Obligation Improvement Bonds, Series 2003B. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING THE CALL OF THE OUTSTANDING GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2002B AND GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2003B WHEREAS, by Resolution duly adopted on October 2, 2002 (the "2002B Resolution "), the City issued $4,185,000 original principal amount of General Obligation Improvement Bonds, Series 2002B, dated November 1, 2002 (the "2002B Bonds "). The City has sufficient funds on hand in the debt service account of the General Obligation Improvement Refunding Bonds, Series 2002B Fund (the "2002B Fund ") to call the remaining $2,725,000 outstanding principal amount of the February 1, 2012 through 2019 maturities of the 2002B Bonds on February 1, 2011, at a price of par plus accrued interest. The remaining outstanding balance of principal and interest due on the 2002B Bonds is $2,986,411.25 WHEREAS, by Resolution duly adopted on February 5, 2003 (the "2003B Resolution "), the City issued $4,065,000 original principal amount of General Obligation Improvement Bonds, Series 2003B, dated March 1, 2003 (the "2003B Bonds "). The City has sufficient funds on hand in the debt service account of the General Obligation Improvement Bonds, Series 2003B Fund (the "2003B Fund ") to call the remaining $2,725,000 outstanding principal amount of the February 1, 2012 through 2019 maturities of the 2003B Bonds on February 1, 2011 at a price of par plus accrued interest. The combined remaining outstanding balance of principal and interest due on the 2003B Bonds is $2,991,701.25. NOW, THEREFORE, be it resolved by the City Council of the City of Cottage Grove, Minnesota, as follows: 2ss4425va 1.01 The City Council hereby determines that there exists sufficient funds in the 2002B Fund to prepay on February 1, 2011, $2,725,000 aggregate principal amount of 2002B Bonds maturing on February 1, of the years 2012 through 2019, and the interest due thereon. 1.02 The City Council hereby determines that there exists sufficient funds in the 2003B Fund to prepay on February 1, 2011, $2,725,000 aggregate principal amount of 2003B Bonds maturing on February 1 of the years 2012 through 2019, and the interest due thereon. 1.03 The Finance Director of the City, as Bond Registrar for the 2002B Bonds and the 2003B Bonds, is hereby authorized and directed to cause the Notices of Call for Redemption attached hereto as Exhibit A and Exhibit B to be given in accordance with the provisions of the Resolution. 1.04 No further action shall be required of the City Council to complete prepayment of the Bonds. The motion for the adoption of the foregoing resolution was duly seconded by Member , and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon the resolution was declared duly passed and adopted. I 2884425vl STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF COTTAGE GROVE I, the undersigned, being the duly qualified and acting City Clerk of the City of Cottage Grove, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to authorizing the call of the outstanding General Obligation Improvement Bonds, Series 2002B and the General Obligation Improvement Bonds, Series 2003B. WITNESS my hand officially on November , 2010. Caron Stransky, City Clerk 2884425vl GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2002B CITY OF COTTAGE GROVE, WASHINGTON COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Cottage Grove, Washington County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 those outstanding bonds of the City designated General Obligation Improvement Bonds, Series 2002B, dated November 1, 2002, having stated maturity dates in the years 2012 through 2019 and totaling $2,725,000 in principal amount and having the CUSIP number listed below: Year CUSIP Number 2012 2013 2014 2015 2016 2017 2019 The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on the bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the office of the Finance Director of the City of Cottage Grove, Minnesota. Dated: November 3, 2010. BY ORDER OF THE CITY COUNCIL CITY OF COTTAGE GROVE, MINNESOTA /s/ Caron Stransky, City Clerk The City shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holder. �I i GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2003B CITY OF COTTAGE GROVE, WASHINGTON COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Cottage Grove, Washington County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 those outstanding bonds of the City designated General Obligation Improvement Bonds, Series 2003B, dated March 1, 2003, having stated maturity dates in the year 2012 through 2019 and totaling $2,725,000 in principal amount and having CUSIP numbers listed below: Year CUSIP Number 2012 2013 2014 2015 2016 2017 2019 The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on the bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the office of the Finance Director of the City of Cottage Grove, Minnesota. Dated: November 3, 2010. BY ORDER OF THE CITY COUNCIL CITY OF COTTAGE GROVE, MINNESOTA /s/ Caron Stransky, City Clerk The City shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holder. MM 2884425v1