HomeMy WebLinkAboutItem 06.oJune 16, 2014 Item
RESOLUTION AUTHORIZING ISSUANCE AND SALE OF $13,730,000 GENERAL
OBLIGATION REFUNDING BONDS, SERIES 2014B
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Resolution Authorizing
Issuance and Sale of $13.73 million General Obligation Refunding Bonds Series 2014 B
Approval of the Resolution will result in the financing of the G.O. Street Reconstruction Bonds Series
2005 A and the G.O. Capital Improvement Bonds Series 2007 B.
Overview
The purpose of the 2014 B Bonds is to reduce future interest costs on two outstanding issues. The issuance
of the 2014 B Bonds is being conducted as a "crossover" advance refunding in which the proceeds are
placed in an escrow account and invested in government securities. These investments and their earnings
are structured to pay interest on the 2014 B Bonds through the call dates of the two older bonds, at which
time the escrow account will crossover and prepay the entire remaining principal of the two older bonds.
After the call dates, the City will cross over and begin making debt service payments on the 2014 B Bonds,
taking advantage of the lower interest rates. The tax levy will be reduced by $39,867 and $118,080 in 2016
and 2017 respectively.
Primary Issues to Consider
• Estimated cost savings. The refunding is projected to result in the City realizing interest cost
savings as follows:
Average
Annual Future Present
Savings Value Benefit Value Benefit
2005 A Street Reconstruction Bonds $
38,200 $
151,980
$
90,840
2007 B Capital Improvement Bonds $
80,960 $
1,209,985
$
934,811
Total
$
1,361,965
$
1,025,651
Supporting Information
• Recommendations fQ x r Issuance of Bonds — prepared by Springsted
Financial Impact: See attached Budgeted: No Source: Taxes and Special Assessments
Related Documents (CIP, ERP, etc.):
Notes:
CHTY OF LAKEVILLE
RESOLUTION
Date: June 16, 2014 Resolution No.
RESOLUTION AUTHORIZING ISSUANCE AND SALE OF
$13,730,000 GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2014B
BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City), as follows:
SECTION 1. PURPOSE It is hereby determined to be in the best interests of the City to issue its General
Obligation Refunding Bonds, Series 2014B, in the principal amount of $13,730,000 (the Bonds), pursuant
to Minnesota Statutes, Chapter 475, to refund the 2017 -2026 maturities of the City's General Obligation
Street Reconstruction Bonds, Series 2005A and the 2018 -2032 maturities of the City's General Obligation
Capital Improvement Plan Bonds, Series 2007D.
SECTION 2. TERMS OF PROPOSAL Springsted Incorporated, financial consultant to the City, has
presented to this Council a form of Terms of Proposal for the Bonds which is attached hereto and hereby
approved and shall be placed on file by the City Clerk Each and all of the provisions of the Terms of
Proposal are hereby adopted as the terms and conditions of the Bonds and of the sale thereof. Springsted
Incorporated is hereby authorized, pursuant to Minnesota Statutes, Section 475.60, Subdivision 2,
paragraph (9), to solicit proposals for the Bonds on behalf of the City on a competitive basis without
requirement of published notice.
SECTION 3. SALE MEETING This Council shall meet at the time and place shown in the Terms of
Proposal, for the purpose of considering proposals for the purchase of the Bonds and of taking such
action thereon as may be in the best interests of the City.
APPROVED AND ADOPTED this 16`s day of June, 2014.
CITY OF LAKEVILLE,
By:
Matt Little, Mayor
ATTEST:
Charlene Friedges, City Clerk
City of Lakeville, Minnesota
Recommendations for Issuance of Bonds
$9,160,000 General Obligation Improvement Bonds, Series 2014A
$13,730,000 General Obligation Refunding Bonds Series 20148
The City Council has under consideration the issuance of bonds to (i) finance the 2014 Street Reconstruction
projects and (ii) refund two general obligation issues for interest cost savings. This document provides information
relative to the proposed issuance.
KEY EVENTS: The following summary schedule includes the timing of some of the key events that will
occur relative to the bond issuance.
June 16, 2014 City Council sets sale date and terms
Week of July 7, 2014 Rating conference is conducted
July 21, 2014,10:30 AM Competitive bids are received
July 21, 2014, 7:00 PM City Council considers award of bonds
August 20, 2014 (est.) Proceeds are received
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RATING: An application will be made to Moody's Investors Service for a rating on the Bonds. The
City's general obligation debt is currently rated 'Aal' by Moody's.
THE MARKET: Performance of the tax- exempt market is often measured by the Bond Buyer's Index ( "6131 ")
which measures the yield of high grade municipal bonds in the 20 year for general
obligation bonds (the BBI 20 Bond Index) and the 30th year for revenue bonds (the BBI 25
Bond Index). The following chart illustrates these two indices over the past five years.
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BBI 25 -bond (Revenue) and 20 -bond (G.O.) Rates for 5 Years
Ending 5/29/2014
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- -88120 Bond
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POST ISSUANCE The issuance of these bonds will result in post- issuance compliance responsibilities. The
COMPLIANCE: responsibilities are in two primary areas: i) compliance with federal arbitrage requirements
and ii) compliance with secondary disclosure requirements.
Federal arbitrage requirements include a wide range of implications that have been taken
into account as your issue has been structured. Post - issuance compliance responsibilities
for your tax - exempt issue include both rebate and yield restriction provisions of the IRS
Code. In general terms the arbitrage requirements control the earnings on unexpended
bond proceeds, including investment earnings, moneys held for debt service payments
(which are considered to be proceeds under the IRS regulations), and /or reserves.
The arbitrage rules provide an exception from rebate provisions for gross proceeds that are
spent within an 18 -month period in accordance with certain spending criteria. The City
expects to meet the 18 -month spending exception with respect to the Series 2014A Bonds
and gross proceeds that meet the test will qualify for an exception to rebate.
Since the issuance of the Series 2014B Bonds includes an advance refunding component,
an expenditure exception for rebate is not available. The proceeds of the advance
refunding portion of the Series 2014B Bonds will be invested in an escrow account until the
call date of the refunded bonds. Arbitrage rules do not permit investment earnings on the
escrow account to exceed the yield on the Series 2014B Bonds; therefore, no excess
arbitrage will be earned on sale proceeds.
Yield restriction provisions will apply to the debt service fund and any project proceeds
unspent after three years under certain conditions and the funds should be monitored
throughout the life of each issue.
Secondary disclosure requirements result from an SEC requirement that underwriters
provide ongoing disclosure information to investors. To meet this requirement, any
prospective underwriter will require the City to commit to providing the information needed
to comply under a continuing disclosure agreement.
Springsted currently provides arbitrage and continuing disclosure compliance services to
the City under separate contracts. Contract amendments adding these issues will be
provided to City staff.
SUPPLEMENTAL Supplementary information will be available to staff including detailed terms and conditions
INFORMATION AND of sale, comprehensive structuring schedules and information to assist in meeting post -
BOND RECORD: issuance compliance responsibilities.
Upon completion of the financing, a bond record will be provided that contains pertinent
documents and final debt service calculations for the transaction.
$9,160,000 General Obligation Improvement Bonds, Series 2014A
Description of Issue
PURPOSE: Proceeds of the Series 2014A Bonds, together with $21,828 of prepaid assessments, will
be used to finance the City's 2014 Street Reconstruction Projects.
Springsted Paget
AUTHORITY: The Series 2014A Bonds are being issued pursuant to Minnesota Statutes, Chapters 429
and 475.
Statutory Requirements: Chapter 429 requires that no less than 20% of the project costs
be assessed. The City is assessing approximately 28% of the project costs and therefore
meets the statutory requirements.
SECURITY AND The Series 2014A Bonds will be general obligations of the City, secured by its full faith and
SOURCE OF credit and taxing power. The Series 2014A Bonds will be paid from a combination of
PAYMENT: property taxes and special assessments against benefited properties. The City will make
its first levy for the Series 2014A Bonds in 2014 for collection beginning in 2015.
Assessments in the principal amount of $2,520,000 will be spread over a term of 20 years
with equal annual principal payments. Interest will be charged on the unpaid balance at a
rate of 3,75 %. Assessments are expected to be filed in 2014 for first collection beginning
in 2015.
Assessments are expected to pay 100% of the debt service on the assessed portion of the
Series 2014A Bonds.The City will be required to levy ad valorem taxes to pay debt service
on the levy and water fund portions of the Series 2014A Bonds. The City expects to use,
but not pledge, revenue of the water fund to offset the levy on the water fund portion of the
issue. Interest on the Series 2014A Bonds due February 1, 2015 has been capitalized with
bond proceeds.
STRUCTURING At the direction of the City, the Series 2014A Bonds have been structured with three
SUMMARY:
purposes over different terms, The assessed portion of the issue was amortized over a
term of 20 years and structured around the assessment income stream to provide for level
annual surplus. The levy and water fund portions of the issue were each structured over
terms of 10 years to provide for even annual levy requirements.
SCHEDULES
Schedules attached include a sources and uses of funds, assessment income and
ATTACHED:
estimated net debt service requirements, in aggregate and by purpose, given the current
interest environment.
RISKS /SPECIAL
The outcome of this financing will rely on the market conditions at the time of the sale. Any
CONSIDERATIONS:
projections included herein are estimates based on current market conditions.
SALE TERMS AND
Variability of Issue Size A specific provision in the sale terms permits modifications to the
MARKETING:
issue size and/or maturity structure to customize the issue once the price and interest rates
are set on the day of sale.
Prepayment Provisions: The Series 2014A Bonds maturing on or after February 1, 2024
may be prepaid at a price of par plus accrued interest on or after February 1, 2023.
Bank Qualification: The City is issuing more than $10 million in tax- exempt obligations in
the current calendar year; therefore the Series 2014A Bonds Bonds are not designated as
bank qualified.
Springsted Page
$13,730,000 General Obligation Refunding Bonds Sedes 2014B
Description of Issue
PURPOSE: The proceeds of the Series 2014B Bonds will be used to advance crossover refund (i) the
City's General Obligation Street Reconstruction Bonds, Series 2005A (the "Series 2005A
Bonds "); and (ii) the City's General Obligation Capital Improvement Plan Bonds,
Series 2007D (the "Series 2007D Bonds "). The Series 2005A Bonds and the Series 2007D
Bonds are together referred to herein as the "Prior Bonds." These refunding transactions are
being undertaken to achieve interest cost savings.
The Series 2005A Bonds were originally issued to finance three street reconstruction
projects.
The Series 2007D Bonds were originally issued to finance the cost of constructing and
furnishing a police station as well as the cost of acquiring the land on which it was
constructed.
The table below shows the detailed information related to the Prior Bonds:
Refunded Refunded Refunded
Issue Refunded Maturities Principal Call Date Avg. Cpn.
Series 2005A Feb. 1, 2017 -2026 $1,950,000 Feb. 1, 2016 4.07%
Series 2007D Feb. 1, 2018 -2032 $11,185,000 Feb. 1, 2017 4.82%
AUTHORITY: Statutory Authority: The Series 2014B Bonds are being issued pursuant to Minnesota
Statutes, Chapter 475.
Statutory Requirements: Minnesota Statutes require that advance refundings, in certain
cases, achieve a minimum present value savings level of 3% of the present value of
refunded debt service. The refundings of the Prior Bonds achieve savings in excess of
the 3% minimum, both on a collective and individual basis.
SECURITY AND The Series 2014B Bonds will be general obligations of the City for which the City will pledge
SOURCE OF its full faith and credit and power to levy direct general ad valorem taxes. In addition, the
PAYMENT: City will pledge special assessments from benefited properties odginally pledged to the
Series 2005A Bonds.
The issuance of the Series 2014B Bonds is being conducted as a crossover advance
refunding in which the proceeds of the Series 2014B Bonds are placed in an escrow
account with a major bank and invested in government securities. These investments and
their earnings are structured to pay interest on the Series 2014B Bonds to and including the
call dates of the Prior Bonds, at which time the escrow account will prepay the remaining
principal of the Prior Bonds. The City will continue to pay the originally scheduled debt
service payments on the Prior Bonds through their respective call dates. After their
respective call date, the City will cross over and begin making debt service payments on
that portion of the Series 2014B Bonds, taking advantage of the lower interest rates.
Springsted Page
STRUCTURING At the direction of City staff, the Series 2014B Bonds have been structured to provide for
SUMMARY: approximately even annual savings with a term matching that of each of the Prior Bonds.
The table below provides detailed estimates with respect to the level of savings for each of
the Prior Bonds assuming interest rates as of the date of these Recommendations:
Springsted Page
Refunded Average Future Present present Value
Issue Annual Value Value Savings
Savings Savings Savings
Series 2005A $38,200 $151,980 $90,840 4.49%
Series 2007D $80,960 1,209,985 934,811 7.64%
Based on the assumed interest rates the refunding issue has a true interest cost of 2.76 %.
SCHEDULES
Schedules attached include: a preliminary feasibility summary, estimated debt service
ATTACHED:
requirements and interest cost savings, in total and individually for the Prior Bonds, given
the current interest rate environment.
RISKS /SPECIAL
The outcome of this financing will rely on the market conditions at the time of the sale. Any
CONSIDERATIONS:
projections included herein are estimates based on current market conditions.
SALE TERMS AND
Variability of Issue Size A specific provision in the sale terms permits modifications to the
MARKETING:
issue size and /or maturity structure to customize the issue once the price and interest rates
are set on the day of sale.
Prepayment Provisions: The Series 2014B Bonds maturing on or after February 1, 2025
may be prepaid at a price of par plus accrued interest on or after February 1, 2024.
Bank Qualification: The City is issuing more than $10 million in tax - exempt obligations in the
current calendar year, therefor; the Series 2014B Bonds Bonds are not designated as bank
qualified.
FEDERAL
The Sedes 20148 Bonds are an advance refunding under federal tax law and may not
CONSIDERATIONS
themselves be advance refunded using tax exempt bonds. If market conditions permit, a
AND /OR
current refunding could be done at or after the call date.
REQUIREMENTS:
Tax exempt advance refunding transactions have more restrictive federal arbitrage
limitations than current refunding issues as they pertain to the escrow account. Coincident
with the sale of the Series 2014B Bonds, a verification agent will be retained by the City to
confirm that the refunding escrow is in compliance with federal yield restrictions and will also
verify the adequacy of the escrow to satisfy its cash flow requirements.
Springsted Page
$9,160,000
City of Lakeville, Minnesota
General Obligation Improvement Bonds
Series 2014A- Issue Summary
Total issue Sources And Uses
Dated 08120/2014 1 Delivered 002
issue
Assessed City Levy Water Fund Summary
Sources OF Funds
$2,485,000.00
Par Amount of Bonds ............ ...............................
$2,520,000.00
Repaid Assessrrent s ........... ...............................
21,828.00
Total Sources ..................... ...............................
$2,541,828.00
uses Of Funds
3,216,346.00
Contract ................................ ...............................
1,958.360.00
Engineering ........................... ...............................
302,397.00
Other..................................... ...............................
212,006.00
Total underwriter's Discount (1.000 %) ..............
25,200.00
Deposit to Capitalized Interest (CF) Fund............
28,272.27
Costs of Issuance ................. ...............................
15,268.55
Rounding Ammunt .................................................
324.18
Total uses ........................... ............................... $2,541,828.00
2014A GObn➢m✓emenr Bond I Laue Summary 1614120M 13:37PM
$4,155,000.00
$2,485,000.00
$9,160,000.00
-
-
21,828.00
$4,155,000.00
$2,485,000.00
$9,181,828.00
3,216,346.00
1,972,456.00
7,147,162.00
496,648.00
304,574.00
1,103,619.00
339,291.00
150,288.00
701,585.00
41,550.00
24,850.00
91,600.00
32,838.41
19,635.29
80,745.97
25,174.95
15,056.50
55,500.00
3,151.64
(1,859.79)
1,616.03
$4,155,000.00 $2,485,000.00 $9,181,828.00
Sprinostec Page
$9,160,000
City of Lakeville, Minnesota
General Obligation Improvement Bonds
Series 2014A - Issue Summary
Aggregate Net Debt
DATE
2014A GO
Improvement
Bonds
Assessed
2014A GO
Improvement
Bonds City
Levy
2014A GO
Improvement
Bonds Water
Fund
TOTAL
02/01/2016
208,217.50
463,427.50
278,905.00
950,550.00
02/01/2017
202,420.00
466,282.50
277,612.50
946,315.00
02101/2018
196,230.00
462,925.00
275,615.00
934,770.00
02/0112019
194,677.50
463,382.50
277,912.50
935,972.50
02/01/2020
187,720.00
467,582.50
279,432.50
934,735.00
02/01/2021
185,510.00
465,612.50
280,267.50
931,390.00
02/01/2022
182,975.00
467,520.00
275,392.50
925,887.50
02/01/2023
175,115.00
463,170.00
279,892.50
918,177.50
02101/2024
172,177.50
463,065.00
278,782.50
914,025.00
02/01/2025
169,115.00
467,285.00
277,290.00
913,690.00
02/01/2026
160,740.00
-
-
160,740.00
02/01/2027
157,320.00
-
-
157,320.00
02/01/2028
153,660.00
-
-
153,660.00
02/01/2029
149,760.00
-
-
149,760.00
02/01/2030
145,740.00
-
-
145,740.00
02/01/2031
141,600.00
-
-
141,600.00
02/01/2032
137,400.00
-
-
137,400.00
02/01/2033
133,140.00
-
-
133,140.00
02/01/2034
128,820.00
-
-
128,820.00
02/01/2035
124,440.00
-
-
124,440.00
Total
$3,306,777.50
$4,650,252.50
$2,781,102.50
$10,738,132.50
Par Amounts Of Selected Issues
2014AGO Improvement- Assessed ..................................................................................
............................... 2,520,000.00
2014A GO Improvemen -City Levy .....................................................................................
............................... 4.155,00D.00
2014A GO Improveme -Water Fund.. ........................... .........................................
................. . . . . 2.485.000.00
TOTAL..............................................................................................................................
............................... 9,160,000.00
A88 1 61412014 1 237PM
SpringstEd Page
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$2,520,000
City of Lakeville, Minnesota
General Obligation Improvement Bonds, Series 2014A
2014 Projects Assessments
ASSESSMENT INCOME
Dote
Principal
Coupon
Interest
Total P+I
121312015
126,000.00
3.750%
94,500.00
220,500.00
121312016
126,000.00
3.750%
89,775.00
215,775.00
121312017
126,000.00
3.750%
85,050.00
211,050.00
12/312018
126,000.00
3.750%
80,325.00
206,325.00
121312019
126,000.00
3.750%
75,600.00
201,600.00
12/312020
126,000.00
3.750%
70,875.00
196,875.00
12/312021
126,000.00
3.750%
66,150.00
192,150.00
121312022
126,000.00
3.750%
61,425.00
187,425.00
121312023
126,000.00
3.750%
56,700.00
182,700.00
12/312024
126,000.00
3.750%
51,975.00
177,975.00
12/312025
126,000.00
3.750%
47,250.00
173,250.00
12/312026
126,000.00
3.750%
42,525.00
168,525.00
121312027
126,000.00
3.750%
37,800.00
163,800.00
12/312028
126,000.00
3.750%
33,075.00
159,075.00
121312029
126,000.00
3.750%
28,350.00
154,350.00
121312030
126,000.00
3.750%
23,625.00
149,625.00
12/312031
126,000.00
3.750%
18,900.00
144,900.00
12/312032
126,000.00
3.750%
14,175.00
140,175.00
121312033
126,000.00
3.750%
9,450.00
135,450.00
121312034
126,000.00
3.750%
4,725.00
130,725.00
Total
$2,520,000.00
-
$992,250.00
$3,512,250.00
SIGNIFICANT DATES
Fling Date......
First Payment
20MA Assess —is I SWGI PU£POS£ 1 6 14IDM 1 2:32PM
1/012015
12/31/2015
Springsted
Page 9
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Page 10
$4,155,000
City of Lakeville, Minnesota
General Obligation Improvement Bonds
Series 2014A - City Levy
NET DEBT SERVICE SCHEDULE
Date
Principal
Coupon
Interest
Total PA
CIF
Net New DIS
105%
Overlevy
02/0112015
-
-
32,838.41
32,838.41
(32,838.41)
-
-
02/0112016
390,000.00
0.550%
73,427.50
463,427.50
-
463,427.50
486,598.88
0210112017
395,000.00
0.850%
71,282.50
466,282.50
-
466,282.50
489,596.63
02/01/2018
395,000.00
1.150%
67,925.00
462,925.00
-
462,925.00
486,071.25
02/01/2019
400,000.00
1.450%
63,382.50
463,382.50
-
463,382.50
486,551.63
02/0112020
410,000.00
1.700%
57,582.50
467,582.50
-
467,582.50
490,961.63
02/01/2021
415,000.00
1.950%
50,612.50
465,612.50
-
465,612.50
488,893.13
02/01/2022
425,000.00
2.200%
42,520.00
467,520.00
-
467,520.00
490,896.00
02/01/2023
430,000.00
2.350%
33,170.00
463,170.00
-
463,170.00
486,328.50
02/0112024
440,000.00
2.450%
23,065.00
463,065.00
-
463,065.00
486,218.25
02/01/2025
455,000.00
2.700%
12,285.00
467,285.00
-
467,285.00
490,649.25
Total
$4,155,000.00
-
$528,090.91
$4,683,090.91
(32,838.41)
$4,650,252.50
$4,882,765.13
SIGNIFICANT DATES
DatedDate ............................. .......................................
DeliveryDate .................................. ...............................
FirstCoupon Date ........................... ...............................
Yield Statistics
Bond Year Dollars ........................... ...............................
AverageLife.................................................. ............
....
AverageCoupon.. ................................ .........................
Net Interest Cost ( NIC) ..................................... -- ..........
True Interest Cost ( TIC) ................... ...............................
Bond Yield for Arbitrage Purposes ............ .................. -
All Inclusive Cost ( AIC).............. . ...................................
.
IRS Form 8038
Net Interest Cost........................... -- .............................
Weighted Average lv bturity ............. ...............................
1014A GOA,pmvemem BoM I C3yle 16/4/10M 1227PM
8/20/2014
8/20/2014
2/01/2015
$25,288.21
6.086 Years
2.0882891%
2.2525950%
2.2526262%
2.4258120%
2.3617500%
2.0882891%
6.086 Years
Springsted
Page 11
$2,485,000
City of Lakeville, Minnesota
General Obligation Improvement Bonds
Series 2014A- Water Fund
NET DEBT SERVICE SCHEDULE
Date
Principal
Coupon
Interest
Total PA
CIF
Net New D/S
105%
Overlevy
02/01/2015
-
-
19,635.29
19,635.29
(19,635.29)
-
-
02/01/2016
235,000.00
0.550%
43,905.00
278,905.00
-
278,905.00
292,850.25
02/0112017
235,000.00
0.850%
42,612.50
277,612.50
-
277,612.50
291,493.13
02/01/2018
235,000.00
1.150%
40,615.00
275,615.00
-
275,615.00
289,395.75
02/01/2019
240,000.00
1.450%
37,912.50
277,912.50
-
277,912.50
291,808.13
02/0112020
245,000.00
1.700%
34,432.50
279,432.50
-
279,432.50
293,404.13
02/01/2021
250,000.00
1.950%
30,267.50
280,267.50
-
280,267.50
294,280.88
02/0112022
250,000.00
2.200%
25,392.50
275,392.50
-
275,392.50
289,162.13
02/01/2023
260,000.00
2.350%
19,892.50
279,892.50
-
279,892.50
293,887.13
02/0112024
265,000.00
2.450%
13,782.50
278,782.50
-
278,782.50
292,721.63
02/01/2025
270,000.00
2.700%
7,290.00
277,290.00
-
277,290.00
291,154.50
Total
$2,485,000.00
-
$315,737.79
$2,800,737.79
(19,635.29)
$2,781,102.50
$2,920,157.63
SIGNIFICANT DATES
batedDate ...........................................................................................................................
............................... 8/20/2014
DeliveryDate ........................................................................................................................
............................... 8/20/2014
FirstCoupon Date ..........................................................................................
............................... ...................... 2 /01/2015
Yield Statistics
BondYear Dollars ................................................................................................................
............................... $15.121.35
AverageLi fe ........................................................................................................................
............................... 6.085 Years
AverageCoupon................................... ....... ......... .............................................................................
................. 2.0880268%
Net Merest Cast ( NIC) .........................................................................................................
............................... 2.2523641%
True Interest Cost ( TIC) ............................ - ..................................... ........................................
........................... . 2.2524125%
Bond Yield for Arbitrage Purposes ......................................................................................
............................... 2.4258120%
All Inclusive Cost ( AIC) ........................................................................................................
............................... 2.3615563%
IRS Form 8038
Netinterest Cost ..................................................................................................................
............................... 2.0880268%
Weighted Average Maturity , .................................................................................................
............................... 6.085 Years
2014e oo hprawearrraurd I water Fund 1 61412014 1 2 37PM
Sprin ste , Page 12
Prelininary
Flow of Funds Detail
State and Local Government Series (SLGS) rates for ................
$13,730,000
City of Lakeville, Minnesota
General Obligation Refunding Bonds, Series 20148
Crossover Refunding of Series 2005A, 2007D
6/03/2014
6/03/2014
Preliminary Feasibility Summary
(235,000.00)
Dated 08/20/20141
Delivered 08/2012014
Primary purpose Fund Solution Iviathod ........... ............................
Net Funded
Series 20148 Series 20148
Issue
Total Cost of Investments ............................. ...............................
Ref 2005A Ref 2007D
Summary
Sources Of Funds
Interest Earnings @ 0. 557% ......................... ...............................
5,707.27
Par Amount of Bonds ....................................
............................... $1,810,000.00 $11,920,000.00
$13,730,000.00
Issuer Transfer of Unrestricted Funds ......... ............................... 235,000.00 -
235,000.00
Total Sources .............................................
............................... $2,045,000.00 $11,920,000.00
$13,965,000.00
Uses Of Funds
Average Life ................................................. ...............................
Deposit to Crossover Escrow Fund ............. ............................... 1,992,951.96 11,732,307.05
13,725,259.01
Total Underwriter's Discount
(1. 050%) ....... ............................... 19,005.00 125,160.00
144,165.00
Costs of Issuance .........................................
............................... 28,061.73 66,938.27
95,000.00
Bounding Amount .........................................
............................... 4,981.31 (4,405.32)
575.99
Total Uses ...................................................
............................... $2,045,000.00 $11,920,000.00
$13,965,000.00
Flow of Funds Detail
State and Local Government Series (SLGS) rates for ................
6/0312014
6/03/2014
6/03/2014
Date of OW Candidates ............................... ...............................
(235,000.00)
-
(235,000.00)
Primary purpose Fund Solution Iviathod ........... ............................
Net Funded
Net Funded
Net Funded
Total Cost of Investments ............................. ...............................
$1,992,951.96
$11,732,307.05
$13,725,259.01
Interest Earnings @ 0. 557% ......................... ...............................
5,707.27
167,226.78
172,934.05
Total Draws .................................................. ...............................
$1,998,659.23
$11,899,533.83
$13,898,193.06
PV Analysis Sum m ary (Net to Not)
Net PV Cashfbw Savings @ 2.639 %(Bond Yield ) ....................
320,858.32
939,216.61
1,260,074.93
Total Cash contribution ................................. ...............................
(235,000.00)
-
(235,000.00)
Contingency or Rounding Amount ............... ...............................
4,981.31
(4,405.32)
575.99
Net Present Value Benefd ............................. ...............................
$90,839.63
$934,811.29
$1,025,650.92
Net PV Benefit / $13,135,000 Refunded Principal ........................
4.658%
8.358%
7.809%
Nat PV Benefit / $13, 730,000 Refunding Principal .......................
5.019%
7.842%
7.470%
Bond Statistics
Average Life ................................................. ...............................
7.116 Years
10.840 Years
10.349 Years
Average Coupon ........................................... ...............................
2.1139339%
2.7234112%
2.6681470%
Net interest Cost( NIC)..... ................... .......... ...............................
2.2614371%
2.8202761%
2.7696035%
Bond Yield for Arbitrage Purposes ............... ...............................
2.6392728%
2.6392728%
2.6392728%
True Interest Cost ( TIC) ................................. ...............................
2.2608821%
2.8101858%
2.7579670%
Al Inclusive Cost( AIC) ................................. ...............................
2.5032491%
2.8719850%
2.8370896%
Sems2 ORB Bef2005A.10 I Beue Sw, I614pOH 18.48 AM
Sprinasted Page 13
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Prelininary
$11,920,000
City of Lakeville, Minnesota
General Obligation Refunding Bonds, Series 2014
Crossover Refunding of Series 2007D
NET DEBT SERVICE
Date
Principal
Coupon
Interest
Total PN
PCF Existing 6'S
Net New Df$
105% of Total
02/01/2015
-
-
130,57883
130,578.83
(130,578.83) 779,431.25
779,431.25
818,402.81
02/01/2016
-
-
291,977.50
291,977.50
(291,977.50) 1,085,362.50
1,085,362.50
1,139,630.63
021012017
-
-
291,977.50
291,977.50
(11,476,977.50) 12,270,862.50
1,085,862.50
1,140,155.63
02/01/2018
710,000.00
0.950
291,977.50
1,001,977.50
- -
1,001.97750
1,052,076.38
02/01/2019
710,000.00
1.300%
285,232.50
995,232.50
- -
995,232.50
1,044,994.13
02/01/2020
720,000.00
1.550%
276,002.5D
996,002.50
- -
996,002.50
1,045,802.63
02/0112021
725,000.00
1.80D%
264,842.50
989,842.50
- -
989,842.50
1,039,334.63
021012022
735,000.00
2.00D%
251,792.50
986,792.50
- -
986,792.50
1,036,132.13
02/012023
745,000.00
2.20D%
237,092.50
982,092.50
- -
982,092.50
1,031,197.13
02/01/2024
76D,000.00
2.350%
220,702.50
980,702.50
- -
980,702.50
1,029737.63
02/0112025
775,000.00
2.550%
202,842.50
977,842.50
- -
977,842.5D
1,026734.63
02/01/2026
795,000.00
2.750%
183,080.00
978,080.00
- -
978,080.00
1,026,984.00
02/0112027
815,00000
2.850%
161,217.50
976,217.50
- -
976,217.50
1,025,028.38
02/01/2028
830,000.00
2.950%
137,99D.00
967,990.00
- -
967,990.00
1,016,389.50
02/012029
855,00000
3.050%
113,505.00
968,505.00
- -
968,505.00
1,016,930.25
0210112030
885,000.0D
3.10D%
87,427.50
972,427.50
- -
972,427.50
1,021,048.88
0210112031
915,000.00
3.200%
59,992.50
974,992.50
- -
974,992.50
1,023,742.13
02101/2032
945,000.00
3.250%
30,712.50
975,712.50
- -
975,712.50
1,024,498.13
Total
$11,920,000.00
-
$3,518,94183
$15,438,943.83
(11,899,533.83) $14,135,656.25
$17,675,066.25
$18,558,819.56
Dated...--............. ................ .................................. ................... ....................... ....................................................
............................... 8/2012014
DeliveryDate.... ........... - ...... ....... .................. ...... ......................... ................. . . . .
8/2012014
FirstCoupon Date ....... .. ....... ........... ........................................ ..............._............. .._............................._.._........_...
...... ...................... 2/0112015
Yield Statistics
BondYear Dollars ............................ .................... ............ ... .... ........................ ....... ....._.......
..._...._........,...._......._. ....__......................... $129.210.89
AverageLife. ........ .. ............... .................... ........ __....... .......... .... _ ........... _. .................
.................... ..........._................... 10.840 Years
AverageCoupon ......_...... ........_.._.................... ._..._...._....................................................._..._.._..._........_.............
............................... 2.7234112%
Nethterest Cost ( MC) ............................................. .. .................... ........................ ..... .............................__....__.........
.............................., 2.8202761%
Truehterest Cwt ( TIC) .............. ........................ ...._ - ......................................... ......................._..._..........._........
............................... _... 2.8101858
Bond Yield for Arbtrage Purposes....... ...... — ...... .......... - - .......................... ........
.. ....... 2.8392728%
ANhclusive Cost ( AIC)........._............_.......... ....... _.................... .._.....................................
......... ...... ..... ...................... 2.8719M%
IRS Form 8038
Netinterest Cost ......................_........... ............. __........ ........ ........................._................................_...._...._.........
......................._....... 2.7234112%
WeinEted Aver.. Wtur'nv__.. ____.__.___ .. --- ..........
...... . ... ... 10.840 Years
Semi 20u Ref2005 .20 1 Saxe 20M Aef 20010 1 61 V20N 1 2'W"
`.�F;f in0S E.,0 Page 16
Preliminary
$13,730,000
City of Lakeville, Minnesota
General Obligation Refunding Bonds, Series 2014B
Crossover Refunding of Series 2005A, 2007D
Debt Service Comparison
Date
Total P +I
Escrow
Existing WS Net New US
Old Net US
Savings
02/01/2015
145,615.56
(145,615.56)
974,395.00 974,395.00
974,395.00
$1.361,966.01
02/01/2016
325,600.00
(2,275,600.00)
3,274,665.00 1,324,665.00
1,324,665.00
-
02/01/2017
490,600.00
(11,476,977.50)
12,270,862.50 1,284,485.00
1,324,352.50
39,867.50
02/01/2018
1,204,362.50
-
- 1,204,362.50
1,322,442.50
118,080.00
02/01/2019
1,196,002.50
-
- 1,196,002.50
1,319,147.50
123,145.00
02/01/2020
1,199,562.50
-
- 1,199,562.50
1,314,322.50
114,760.00
02/012021
11195,690.00
-
- 1,195,690.00
1,313,052.50
117,362.50
021012022
1,189,400.00
-
- 1,189,400.00
1,304,952.50
115,552.50
02/012023
11186,100.00
-
- 1,186,100.00
1,305,402.50
119,302.50
00012024
1,185,640.00
-
- 1,185,640.00
1,303,747.50
118,107.50
02/012025
1,183,315.00
-
- 1,183,315.00
1,305,182.50
121,867.50
OZD1/2026
1,183,580.00
-
- 1,183,580.00
1,304,232.50
120,652.50
02/012027
976,217.50
-
- 976,217.50
1,056,112.50
79,895.00
02/012028
967,990.00
-
- 967,990.00
1,051,112.50
83,122.50
02/012029
968,505.00
-
- 968,505.00
1,049,36250
80,857.50
021012030
972,427.50
-
- 972,427.50
1,053,893.76
81 46626
02/012031
974,992.50
-
- 974,992.50
1,056,343.76
02/012032
975,712.50
-
- 975,712.50
1,056,712.50
Total
$17,521,313.06
(13,898,193.06)
$16,519,922.50 $20,143,042.50
$21,739,432.52
$
PV Analysis Summary (Net to Net)
NetPV Cashflow Savings ......................................................................................................
............................... 1,596,390.02
GrossW Debt Service Savings .............................................................................................
............................... 1,260,074.93
Net W Cashflow Savings Q 2.639 %(Bond Yield) ...............................................................
............................... 1,260,074.93
TotalCash contribution ...........................................................................................................
............................... (235.000.00)
Contingencyor Rounding Amount ..........................................................................................
............................... 575.99
NetFuture Value Benefit. ........................................................... ...........................................................................
$1.361,966.01
NetResent Value Benefit .......................................................................................................
............................... $1,025,650.92
Net R/ Benefit / $4, 267, 856.05 PV Refunded Interest ................... ........................ ...............................................
24.032%
Net P✓ Benefit 1$14, 254, 974.82 PV Refunded Debt Service .................................................
............................... 7.195%
Net PV Benefit / $13, 135,000 Refunded Principal ...................................................................
............................... 7.809%
Net PV Benefit /$13.730,000 Refunding Rincoal ..................................................................
............................... 7.470%
Refunding Bond Information
RefundingDated Date ...................................................................................... ...............................
....................... 8 /202014
RefundingDelivery Date .........................................................................................................
............................... 8 /20/2014
Sens 20148 Ref2006A, 201 bvve SV al 1614 @ON 1898 AM
5pringsted Page 17
Preliminary
$1,810,000
City of Lakeville, Minnesota
General Obligation Refunding Bonds, Series 2014B
Crossover Refunding of Series 2005A
Debt Service Comparison
Date
Total P +I
Escrow
Existing D/S
Net New D/S
Old Net D/S
Savings
320,858.32
02/01/2015
15,036.73
(15,036.73)
194,963.75
194,963.75
194,963.75
NetPresent Value Benefit ...........................................................................................................
............................... $90,839.63
02/01/2016
33,622.50
(1,983,622.50)
2,189,302.50
239,302.50
239,302.50
Net P/ Benefit/ $1.810,000 Refunding Principal .......................................................................
............................... 5.019%
02/01/2017
198,622.50
-
-
198,622.50
238,490.00
39,867.50
02/0112018
202,385.00
-
-
202,385.00
242,330.00
39,945.00
02/0112019
200,770.00
-
-
200,770.00
240,785.00
40,015.00
02/0112020
203,560.00
-
-
203,560.00
238,960.00
35,400.00
02/0112021
205,847.50
-
-
205,847.50
241,940.00
36,092.50
02/0112022
202,607.50
-
-
202,607.50
239,340.00
36,732.50
02/01/2023
204,007.50
-
-
204,007.50
241,540.00
37,532.50
02/01/2024
204,937.50
-
-
204,937.50
243,135.00
38,197.50
02/01/2025
205,472.50
-
-
205,472.50
244,320.00
38,847.50
02101/2026
205,500.00
-
-
205,500.00
244,870.00
39,370.00
Total
$2,082,369.23
(1,998,659.23)
$2,384,266.25
$2,467,976.25
$2,849,976.25
$382,000.00
PV Analysis Summary (Net to Net)
NetFV Cashflow Savings ...........................................................................................................
............................... 382,000.00
Gross P/ Debt Service Savings .................................................................................................
............................... 320,858.32
Net P/ Cashflow Savings @ 2.639 %(Bond Yield)... ................................................................................................
320,858.32
Total Cash contribution ................................................................................................................
............................... (235.000.00)
Contingency or Rounding Amount..... ............................................ ........ .....................................................................
4.981.31
NetFuture Value Benefit ............................. .................................... ...........................................................................
$151.981.31
NetPresent Value Benefit ...........................................................................................................
............................... $90,839.63
Net P/ Benefit / $405,586.81 PV Refunded Merest....... ............................................................
............................... 22.397%
Net P 1 Benefit / $2,020,843.69 PV Refunded Debt Service .......................................................
............................... 4.495%
Net P 1 Benefit / $1.950,000 Refunded Principal ........................................................................
............................... 4.658%
Net P/ Benefit/ $1.810,000 Refunding Principal .......................................................................
............................... 5.019%
Refunding Bond Information
RefundingDated Date .................................................................................................................
............................... 8/20/2014
RefundingDelivery Date.......................... ............. ................................. .......... ....................................
....................... 8/2012014
seneu 20148 Fef2005A, 20 1 sedan 20149 Ref2005A 1 61412014 1 8, AM
Page 18
Relimnary
$11,920,000
City of Lakeville, Minnesota
General Obligation Refunding Bonds, Series 2014B
Crossover Refunding of Series 2007D
Debt Service Comparison
Date
Total P +I
Escrow
Existing D/S Net New D/S
Old Net D/S
Savings
02/01/2015
130,578.83
(130,578.83)
779,431.25 779,431.25
779,431.25
-
02/01/2016
291,977.50
(291,977.50)
1,085,362.50 1,085,362.50
1,085,362.50
-
02/01/2017
291,977.50
(11,476,977.50)
12,270,862.50 1,085,862.50
1,085,862.50
-
02/01/2018
1,001,977.50
-
- 1,001,977.50
1,080,112.50
78,135.00
02/01/2019
995,232.50
-
- 995,232.50
1,078,362.50
83,130.00
02/01/2020
996,002.50
-
- 996,002.50
1,075,362.50
79,360.00
02/01/2021
989,842.50
-
- 989,842.50
1,071,112.50
81,270.00
02/01/2022
986,792.50
-
- 986,792.50
1,065,612.50
78,820.00
02101/2023
982,092.50
-
- 982,092.50
1,063,862.50
81,770.00
02/01/2024
980,702.50
-
- 980,702.50
1,060,612.50
79,910.00
02/01/2025
977,842.50
-
- 977,842.50
1,060,862.50
83,020.00
02/01/2026
978,080.00
-
- 978,080.00
1,059,362.50
81,282.50
02/01/2027
976,217.50
-
- 976,217.50
1,056,112.50
79,895.00
02/01/2028
967,990.00
-
- 967,990.00
1,051,112.50
83,122.50
02/0112029
968,505.00
-
- 968,505.00
1,049,362.50
80,857.50
02/01/2030
972,427.50
-
- 972,427.50
1,053,893.76
81,466.26
02/01/2031
974,992.50
-
- 974,992.50
1,056,343.76
81,351.26
02/01/2032
975,712.5D
-
- 975,712.50
1,056,712.50
81,000.00
Total
$15,438,943.83
(11,899,533.83)
$14,135,656.25 $17,675,066.25
$18,889,456.27
$1,214,390.02
PV Analysis Summary (Net to Net)
Net FV Cashflow Savings ........ ...............................
Gross PV Debt Service Savings .............................
Net PV Cashflow Savings @ 2.639% (Bond Yield)
Contingency or founding Arrount ._ ........................
Net Future Value Benefit ........... ...............................
Net Resent Value Benefit .........
.__..._._..
Net PJ Benefit /$3,862,269,24 PV Refunded Interest ..........
Net PV Benefit /$12,234,131.13 FV Refunded Debt Service
Net P/ Benefit / $11,185,000 Refunded Principal ..................
Net W Benefit /$11,920,000 Refunding Principal .................
Refunding Bond Information
RefundingDated Date ............................................ ...............................
Refunding Delivery Date ........................................ ...............................
Senes 20148 Ref2005A, 20 1 Sems 2014B Ref 2007D I b/ 4/ GM 18 48 AM
1,214,390.02
939,216.61
939,216.61
(4,405.32)
$1,209,984.70
$934.811.29
24.204%
7.641%
8.358%
7.842%
8/20/2014
8/20/2014
S prinC seed Page 19