5.11.
CC Regular Session
- Meeting Date:
- 04/14/2020
- By:
- Diana Lund, Finance
Information
Title
Adopt Resolution #20-074 Authorizing the Call of of the Outstanding GO Bonds, Series 2011A
Purpose/Background:
In September 2011 the City issued $4,365,000 General Obligation Bonds to fund the costs related to the Bunker Lake Boulevard and Armstrong Boulevard public improvements and for the project known in 2011 as the Legacy Christian Academy development improvements.
The $4,365,000 bond was broken down into an MSA portion of $2,635,000 for the Bunker Lake/Armstrong Boulevard improvements and $1,730,000 Special Assessment portion related to the Legacy Christian improvements.
The MSA portion of the debt has been backed and paid by the City's MSA (state aid) funds with the annual debt service paid from the city's annual state aid allocation. The MSA portion of the bond was for a period of 10 years with the last debt service payment due in February 2022.
The special assessment portion of the bond has been levied against the property of the Legacy school area for a period of 20 years. The last levied assessment would pay the final debt service in year 2032.
It is proposed that the City pay-off the remaining debt service owing on this bond in June, 2020. The amount outstanding as of this date is $1,833,875.83 ($1,815,000 outstanding principal and $18,875.83 accrued interest). By paying off this bond in June, the City will save almost $311,000 in interest costs that was attributed to the debt service payments through February 2032. The estimated annual interest rate through 2032 is 3.52%
Where will the funding come from?
There are 2 years of debt remaining related to the MSA portion, or $575,000. This money will come from the City's MSA account for which it was originally designated.
Approximately $957,000 has been collected in special assessments and prepayments of special assessments related to parcels being sold in the Legacy school area. When parcels are sold they are required to pay off their related share of special assessments.
The remaining balance of approximately $302,000 will come from the City's capital project fund known as Puma/Bunker Street Improvements in which the remaining special assessments owed will be deposited.
The $4,365,000 bond was broken down into an MSA portion of $2,635,000 for the Bunker Lake/Armstrong Boulevard improvements and $1,730,000 Special Assessment portion related to the Legacy Christian improvements.
The MSA portion of the debt has been backed and paid by the City's MSA (state aid) funds with the annual debt service paid from the city's annual state aid allocation. The MSA portion of the bond was for a period of 10 years with the last debt service payment due in February 2022.
The special assessment portion of the bond has been levied against the property of the Legacy school area for a period of 20 years. The last levied assessment would pay the final debt service in year 2032.
It is proposed that the City pay-off the remaining debt service owing on this bond in June, 2020. The amount outstanding as of this date is $1,833,875.83 ($1,815,000 outstanding principal and $18,875.83 accrued interest). By paying off this bond in June, the City will save almost $311,000 in interest costs that was attributed to the debt service payments through February 2032. The estimated annual interest rate through 2032 is 3.52%
Where will the funding come from?
There are 2 years of debt remaining related to the MSA portion, or $575,000. This money will come from the City's MSA account for which it was originally designated.
Approximately $957,000 has been collected in special assessments and prepayments of special assessments related to parcels being sold in the Legacy school area. When parcels are sold they are required to pay off their related share of special assessments.
The remaining balance of approximately $302,000 will come from the City's capital project fund known as Puma/Bunker Street Improvements in which the remaining special assessments owed will be deposited.
Funding Source:
Please see above for full detail. MSA funds: $575,000, Special Assessments Collected: $957,000 and $302,000 from City's Capital Project fund of Puma/Bunker.
Recommendation:
Staff recommends adoption of Resolution #20-074 which authorizes the calling of the City's 2011A General Obligation bond to save almost $311,000 in interest costs.
Action:
Motion to adopt Resolution #20-074 Authorizing the Call of the Outstanding General Obligation Bonds, Series 2011A.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Kurt Ulrich | 04/08/2020 05:06 PM |
- Form Started By:
- Diana Lund
- Started On:
- 03/12/2020 01:03 PM
- Final Approval Date:
- 04/08/2020