1g Call for Sale 2006 G.O. Assessment Bonds
~
CITY OF
CHANHASSEN
MEMORANDUM
TO:
Mayor and City Council
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
FROM:
Greg Sticha, Finance Director
~~ Cr.
O~.
Administration
Phone 952.227 1100
Fax 952.227 1110
DATE:
May 2, 2006
SUBJ:
Call for Sale of General Obligation Improvement Bonds.
Building Inspections
Phone 952.2271180
Fax 952.2271190
BACKGROUND
Engineering
Phone 952.227 1160
Fax 952.227 1170
Based on discussions with our financial advisors Ehlers & Associates, we are
calling for the sale of General Obligation Improvement Bonds related to the
development of the 2005 MUSA area.
Finance
Phone 952.2271140
Fax 952.227 1110
Attached is a presale report from Ehlers. The presale report describes the intent
and background of the sale.
Park & Recreation
Phone 952.227 1120
Fax 952.227 1110
RECOMMENDA TION
Recreation Center
2310 Coulter Boulevard
Phone 952.227 1400
Fax 952.2271404
Staff recommends that the Council approve the resolution providing for the sale
of the bond issue. The actual sale of the bonds will take place at the next
council meeting on May 22, 2006. Approval of this item requires a simple
majority vote of those City Council members present.
Planning &
Natural Resources
Phone 952.227 1130
Fax 952.2271110
ATTACHMENTS
Public Works
1591 Park Road
Phone 952.2271300
Fax: 952.2271310
1. Pre-Sale Report dated May 8, 2006
2. Resolution Providing for the Sale of General Obligation Special Assessment
Bonds.
Senior Center
Phone 952.227 1125
Fax 952.2271110
Web Site
www.ci.chanhassen.mn.us
The City 01 Chanhassen . A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
City of Chanhassen, Minnesota
Pre-Sale Report
May 8, 2006
Proposed Issue: $6,640,000 General Obligation Improvement Bonds, Series 2006A
Purpose: The 2006A bonds will finance the constructIon of sewer and water utilities that
was started m 2005 and the new collector street m the 2005 MUSA area. This
will allow for the orderly development of land in thIs sectIon of the cIty and
provIde for future connections in areas lymg to the south of Hwy 212. These
bonds will be issued under the authonty granted by MN Statutes - Chapter 429.
Term/Call Feature: The 2006A Bonds wIll mature m 7 years, matchmg the term of the assessments,
WIth annual principal payments each February 1st from 2008 through 2014. The
Bonds will be callable in three years, meamng that 2006A Bonds matunng on
2/1/2010 and after may be called on 2/1/2009. ThIS IS a short call penod, but
gIVen the unpredictable speed of full development is warranted.
Funding Sources: This cost WIll be repaId through special assessments against the benefiting
propertIes and scheduled tax levies beglnnmg m 2010. These tax levies are
scheduled m order to meet the state requirement that total sources of revenue are
equal to 105% of the prinCIpal and interest due annually. The tax leVIes may be
cancelled If sufficient funds are available because of prepayment of the
assessments and any mterest earnings on cash balances. The water and sewer
assessments were leVIed m an amount of $1,613,295 at a 6% mterest rate m
2005. The parcels assessed are currently m "green acres" meamng they contmue
to be used m agrIcultural production. This allows assessments to be delayed until
the land IS no longer actively farmed or at a point of convemence for the owner.
Because of uncertam timmg to collect these assessments, the bond Issue includes
capItalIzed mterest through 2/1/07. The preliminary assessment role for 2006
shows benefit m the amount of $4,757,500 and carnes a 6.5% interest rate.
Discussion Issues: The 2006A Bonds will be sold by competitive bids. Because the City plans to
Issue less than $10 mIllion of tax-exempt debt during 2006, the 2006A Bonds
will be "bank qualified" and achIeve the most competitive mterest rates.
As part of our servIces, Ehlers & Associates momtors the CIty's outstanding debt
to determine If there is an opportumty to refund or refinance any outstandmg debt
to save on mterest costs. As of now, there are no bond issues that we recommend
for refinancing.
Schedule:
Pre-Sale Review:
Distribute Officml Statement:
EstImated Closing Date:
May 8, 2006
Week of May 8, 2006
Week of May 15,2006
May 22, 2006
June 13, 2006
Ratmg Agency IntervIew:
Bond Sale:
Attachment:
ResolutIon authonzing Ehlers to proceed with bond sale
Ehlers Contacts:
Fmancml AdvIsors:
Mark Ruff (651) 697-8505
Bruce Dejong (651) 697-8548
JessIca Cook (651) 697-8546
Bond Analysts:
Diana Lockard (651) 697-8534
DebbIe Holmes (651) 697-8536
Bond Sale Coordinator:
ConnIe Kuck (651) 697-8527
The Official Statement for this financing will be mailed to the Council Members at their home address for review
prior to the sale date.
Chanhassen, MN
$6,640,000 General Obligation Improvement Bonds, Series 2006A
Sources & Uses
Dated 06/13/20061 Delivered 06/13/2006
Sources Of Funds
Par Amount of Bonds
$~,~1Q,OOO.00
Total Sources
-..-.--- _.---,."-,..._....."'.__._.~..._-------_.._--_.~. .~..._._-~-------_._""----"-
______ _..t~,~iQ,OOO.QQ.
Uses Of Funds
T.<>tall~tl~.t'~"::ri~~r.:~J~_i~Sl.ll!lU9J!99~L__
Costs of Issuance
Depos it toCapitaIizedlntere~t (c;IF) FU!ld
Q~sit to Project Constructi.Q!lJund_
Rounding Af!\()llnt
___________________53,120:99_
39,5QO.00
175,311 42
6,370,795.00
1,~I3. 5 8
Total Uses
$6,640,000.00
06A $6,640 GO Impr Bonds I SINGLE PURPOSE I 4/26/2006 I 5:29 PM
Ehlers & Associates
Leaders in Public Finance since 1955 RaQe 1
Chanhassen, MN
$6,640,000 General Obligation Improvement Bonds, Series 2006A
Debt Service Schedule
Date
06/13/2006
02/01/2007
08/01/2007
02/01/2008
08/01/2008
02/01/2009
08/01/2009
02/01/2010
08/01/2010
02/01/2011
08/01/2011
02/01/2012
08/01/2012
02/01/2013
08/01/2013
02/01/2014
Total
Coupon
Interest
Principal
175,31142
138,403 75
138,403.75
1~~,121.~~
129,121.25
112,321.25
112,321.25
94,602.50
_1~051.QO_OJlQ___.._____.'!,.!.QQ"(~____-Y..'!,6022Q..________
71,950.00
71,95000
47,800.00
47,800.00
22,QOO:00 .
22,000.00
$1,407,708.92
470,000.00
3.950%
840,000.00
4.000%
875,000.00
4.050%
1,150,000 00
4.200%
1,200,000.00
4.300%
1,000,000.00
$6,640,000.00
4 400%
Yield Statistics
Bond Year Dollars
A verag~Life.
A verageCQ.up<ln
Net Interest Cost (N}c;t..
True Interest Cost
Bond Yield for Arbitrage Purposes
All Inclusive Cost (Ale;).
IRS Form 8038
Net Interest Cost
Weighted Average Maturity
06A $6.640 GO Impr Bonds I SINGLE PURPOSE I 4/26/2006 I 5:29 PM
Total P+I
175,311 42
138,403.75
608,403.75
.......... !22,g!,,2,~
969,121.25
112,321.25
987,321.25
94,602.50
1,199,602.50
71,950.00
1,221,950.00
47,800.00
1,247,800.00
2~,0_OO:OO
1,022,000.00
$8,047,708.92
Fiscal Total
175,31142
746,807.50
1,098,242.50
1,099,642.50
_ --...1 ,?~4 ,2_05 ,00.
1,293,900.00
1,295,600.00
1,044,000.00
$33,]50)}
5.023 Years
4.2209741%
.~---_.,--_..._---
4.3802528%
4.3962596%
-.....----...-.-".-,.,-" ----
4.2148816%
4.5323740%
4.2209741 %
n_.." ._. .
5.023 Years
Ehlers & Associates
Leaders In Public Finance since 1955 Pa!:je 2
Chao hassen, MN
$6,640,000 General Obligation Improvement Bonds, Series 2006A
Net Debt Service Schedule
Date Principal Coupon Interest Total P+I CIF Net New D/S Fiscal Total
06/13/2006
02/01/2007 175,311 42 175,311 42 (175,311 42)
08/0112007 138,403.75 138,403.75 138,403.75
02/01/2008 470,000.00 3.950% 138,40375 608,403 75 608,403.75 746,807.50
08/01/2008 ... 1~2,1~1:~5. ...........122,1~1}5 . ...1~2,1}1:~?
02/01/2009 840,000.00 4.000% 129,121.25 969,121.25 969,121.25 1,098,242.50
08/01/2009 112,321.25 112,321.25 112,321.25
02/01/2010 875,000.00 4.050% 112,321.25 987,321.25 987,321.25 1,099,642.50
08/01/2010 94,602.50 94,602.50 94,602.50
02/01/2011 .__J,I 05 ,go_o, 00 4 100% .... 94,602.50._._J,I.22&0}JO.....___.. _....._.._1.122,?_O'~?0_ .. . ..I,?.9.4,2()5,OO
~_..._-~~---~_.------.---
08/01/2011 71,950.00 71,950.00 71,950.00
02/01/2012 1,150,000.00 4.200% 71,950.00 1,221,950.00 1,221,950.00 ] ,293,900.00
08/01/2012 47,800.00 47,800.00 47,800.00
02/01/2013 1,200,000.00 4.300% 47,800.00 1,247,800.00 1,247,800.00 1,295,600.00
08/01/2013 ... . ....?2~()()():00 .22,000.00 ....}?!OO():90
02/01/2014 1,000,000.00 4 400% 22,000.00 1,022,000.00 1,022,000.00 1,044,000.00
Total $6,640,000.00 $1,407,708.92 $8,047,708.92 (175,311.42) $7,872,397.50
06A $6,640 GO Impr Bonds I SINGLE PURPOSE I 4/26/2006 I 5:29 PM
Ehlers & Associates
Leaders In Public Finance since 1955 Pa!le 3
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Resolution No.
Council Member
introduced the followmg resolutIOn and moved its adoption:
Resolution Providing for the Sale of
$6,640,000 General Obligation Improvement Bonds, Series 2006A
A. WHEREAS, the City Council of the City of Chanhassen, Mmnesota, has heretofore determmed that It
is necessary and expedient to Issue the City's $6,640,000 General ObligatIon Improvement Bonds,
Series 2006A (the "Bonds"), to finance water, sewer and roadway Improvements; and;
B. WHEREAS, the City has retained Ehlers & Associates, Inc., m Roseville, Mmnesota ("Ehlers"), as its
mdependent financial advisor for the Bonds and is therefore authorized to sohclt proposals m
accordance With Minnesota Statutes, Section 475.60, SubdivIsion 2(9);
NOW, THEREFORE, BE IT RESOLVED by the City Council of Chanhassen, Minnesota, as follows:
1. AuthorizatIOn; Findmgs. The City Council hereby authonzes Ehlers to soliCit proposals for the sale
of the Bonds.
2. Meeting; Proposal Opemng. The City Council shall meet at City Hall on May 22, 2006, for the
purpose of considenng sealed proposals for and awardmg the sale of the Bonds.
3. OffiCial Statement. In connection with said sale, the officers or employees of the City are hereby
authonzed to cooperate With Ehlers and participate m the preparation of an offiCial statement for the
Bonds and to execute and deliver It on behalf of the City upon ItS completion.
The motIon for the adoption of the foregoing resolution was duly seconded by Council Member
and, after full diSCUSSIOn thereof and upon a vote being taken thereon, the
following Council Members voted m favor thereof:
and the followmg voted against the same:
Whereupon smd resolution was declared duly passed and adopted.
Dated this _ day of
City Clerk
Prepared by Ehlers & Associates, Inc.