1D Resol for Gen. Oblig. BondsCITYOF
CH H SI N
7700 Market Bou evard
PO Box 14~
C ia,'/ha,ssen MN 55317
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Fa< 952 2271170
Finance
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Recreation Center
2310 Couiter Botlievard
Phone: 952227 1400
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Nalural Resources
Plsone 952 227 1130
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Public Works
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?hor e: 952 227.1300
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Web Sile
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MEMORANDUM
TO:
FROM:
DATE:
Mayor
City Council
Bruce M. DeJong, Finance
November 19, 2003
SUBJECT: Resolution Approving Call of Outstanding
1995B, 1995C, and 1996B General Obligation Bonds
Part of our budget process involved transferring General Fund monies toward our
debt service and canceling debt levies for 2004. In keeping with that philosophy,
staff is proposing that we transfer the 2003 portion this year and call the bonds for
which we do not intend to levy any more debt service. We can save a significant
amount of interest expense because these three bond issues have interest payments
that range from 4.5% to 5.55% while our investment portfolio is earning less than
3%. This will result in a net interest savings of over $30,000.
The 1995C and 1996B debt service funds each pay for a portion of the same
project. The assessments were mistakenly all tied to the 1996B fund, which has
led to a large surplus in that fund and a large deficit in the 1995C fund. We can
pay these off and clean up our general ledger at the same time.
The bond funds do not have sufficient cash to pay all of the remaining balances.
Payment will occur from two sources. The first is a transfer of the $815,000 that
is anticipated from the 2003 General Fund budget. The remainder will come from
the Closed Bond fund. We will then transfer the remaining assessment balances
in the 95B, 95C, and 96B debt service funds back to the closed bond. Those
balances will be collected over the next three years to repay the $391,586 needed
at this time to pay off all the bonds.
Recommendation
Staff recommends that the City Council adopt the resolution as presented and call
the 1995B, 1995C, and 1996B General Obligation Bonds as of December 30,
2003. This action requires a simple majority of those present.
The City ol Chanbassen · A growing ,3ommur~E? with cie,al ilks
City of Chanhassen
Schedule of Debt Service Payments
Fund# Bond Issue
Date Due
Principal
Interest
Total
339
339
339
340
340
340
~42
142
~42
142
~42
G.O. Improvement Bonds 1995B
GO. Improvement Bonds 1995B
G.O. Improvement Bonds 1995B
GO. Improvement Bonds 1995C
G.O. Improvement Bonds 1995C
G.O. Improvement Bonds 1995C
G.O. Improvement Bonds 1996B
G.O. Improvement Bonds 1996B
G.O. Improvement Bonds 1996B
GO. Improvement Bonds 1996B
G.O. Improvement Bonds 1996B
Grand Total
2/1/2004
8/1/2004
2/1/2005
2/1/20O4
8/1/2004
2/1/2005
2/1/2004
8/1/2004
2/1/2005
8/1/2005
2/1/2006
175,00000
145,000.00
320,000.00
440,000.00
34O,O0O.00
78O,OOO.0O
570,000.00
54O,OO0.00
545,O00.00
1,655,000.00
2,755,000.00
8,88000
8,880.00
17,720.00
17,72000
43,017.50
43.017.50
69,617.50
183,880.00
145,000.00
328,880.00
457,720.00
340,000.00
797,720.00
613,017.50
54O,OO0.O0
545,O0O.OO
1,698,017.50
2,824,617.50
Payoff Scenario
Cash Balance
Remaining Principal and Interest
Cash Required
Transfer from 96B
Transfer from General Fund
Transfer Required from Closed Bond Fund
11/19/03 Closed Bond Fund Cash Balance
Ending Cash Balance in Closed Bond Fund
95B
137,366
(328880)
(191,514)
(191,514)
95C
(2,469,025)
(797,720)
(3,266,745)
2,251,673
815,000
(200,072)
96B
3,949,691
(1,698,018)
2,251,673
(2,251,673)
Total
1,618,032
(2,824,618)
(1,2O6,586)
815,000
(391,586)
821,853
430,267
Bond Payments 2002-2012.xls, sorted by fund # Page 1
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
DATE:
November 24~ 2003 RESOLUTION NO:
2003-
MOTION BY:
SECONDED BY:
RESOLUTION APPROVING CALL OF OUTSTANDING
1995B, 1995C, and 1996B GENERAL OBLIGATION BONDS
WHEREAS, the City of Chanhassen, Minnesota (the "City"), has duly issued and
presently has outstanding $320,000 of its General Obligation Improvement
Bonds, Series 1995B dated March 1, 1995 (the "Series 1995B Outstanding
Bonds"), $780,000 of its General Obligation Improvement Bonds, Series 1995C
dated December 1, 1995 (the "Series 1995C Outstanding Bonds"), $1,655,000 of
its General Obligation Improvement Bonds, Series 1996B dated August 1, 1996
(the "Series 1996B Outstanding Bonds"). They are hereinafter collectively
referred to as the "Called Bonds"), and have substantial asset balances in the debt
service accounts or debt service funds, as the case may be, for said Refunded
Bonds; and
WHEREAS, it appears that (i) the payment of these outstanding obligations is in
the best interest of the City of Chanhassen to reduce its total interest expense by
paying all principal and interest due on the Called Bonds as of the call date and
(ii) the payment of such fund balances and asset balances, together with any
required cash transfers, will not materially reduce the financial flexibility of the
City:
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Chanhassen, Minnesota, as follows:
Call for Redemption; Notices. The Series 1995B Outstanding Bonds, Series
1995C Outstanding Bonds, and Series 1996B Outstanding Bonds are hereby
called for redemption on December 30, 2003. The City Manager shall give
published and mailed notice as required by law.
Transfers of funds. The Series 1996B Outstanding Bonds balance not required
to close the debt service fund shall be transferred to pay the Series 1995C
Outstanding Bonds. $815,000 shall be transferred from the General Fund to pay
for the Series 1995C Outstanding Bonds. Any additional amount necessary to
pay the Series 1995C Outstanding Bonds shall be transferred from the Closed
Bond Fund. Any amount necessary to pay the Series 1995B Outstanding Bonds
shall be transferred from the Closed Bond Fund.
RESOLUTION APPROVING CALL OF OUTSTANDING 1995B, 1995C, and 1996B
GENERAL OBLIGATION BONDS
November 24, 2003
Page 2
Adopted this 24th day of November, 2003.
Mayor
Attest:
City Manager