The City has been working with DA Davidson on selling tax increment bonds to retire the debt for the Special Improvement District (SID) 1385 bonds.  This SID improved King Avenue East from South Billings Blvd to Orchard Lane in 2009. 

The City Council approved a parameters resolution at the 04/13/15 meeting authorizing the City Administrator and Finance Director to sign a bond purchase agreement.  The bond purchase agreement was executed on 04/27/15 with DA Davidson. 
 
On May 20, the closing date, the following transactions will take place:

The City will wire $80,262.50 to US Bank for the 7/1/2015 interest payment for SID 1385.

DA Davidson will deposit $5,087,156.80 ($5,170,000 less reoffering discount of $25,973.20 and underwriter compensation of $56,870.00) into the escrow account at US Bank for $4,840,000 principal amount of SID 1385, $63,395.30 for cost of issuance and $183,761.50 for the debt service reserve account.
 
The City will also contribute $160,676 for the debt service reserve account for a total of $344,437.50

The principal payment due on July 1, 2015 will be wired to US Bank on June 30th. This payment along with the amount in escrow will retire the bonds on July 1, 2015.


The term of the tax increment bonds is 25 years at an interest rate of 4.18%.  

A bond purchase agreement has been signed.  Once the resolution is approved, the City can proceed with the closing.  

On July 1, 2015, the SID 1385  bonds will be paid off with the proceeds of the bond sale.  The Miller Crossing increment is approximately $270,000 per year, and the new TIF revenue bond debt service payment is approximately $345,000 per year. The increment from other properties in the district will cover the balance of approximately $75,000 per year.

Staff recommends that the City Council approve the resolution prescribing the terms of the bonds.