HomeMy WebLinkAboutItem 07City of Lakeville
Finance Department
Memorandum
To: Mayor and Council
Justin Miller, City Administrator
From: Jerilyn Erickson, Finance Director
Date: April 24, 2017
Subject: 2017B Bond Issuance; Refunding Opportunities
The following projects are included in the 2017A bond issuance:
• #17-02 - 2017 Street Reconstruction
• #17-04 – Holyoke Avenue Improvements
• #17-07 – 222nd Street and Utility Improvements (Launch Park)
The 2017A bond issuance is estimated to be $10,670,000. It reflects the following:
1) City equity contribution of $50,000 for the 2017 street reconstruction project. This is
funded by the $50,000 included in the 2017 tax levy.
2) Overall term of the bonds is 20 years, although the Holyoke Avenue and Water Fund
portions are amortized over the first 10 years of the bonds and the Street Light portion
over 8 years.
3) Bond Structure – The structure of the 2017A bonds is compliant with the City’s Debt
Policy such that the total maturity length is equal to or less than 20 years and at least
50% of the principal will be retired within 10 years.
Financial Impacts
Based on the current bond estimate, the following chart shows the estimated annual
contributions that would be needed to fund the debt payments:
Debt Service Tax Levy $494k . . . $500k
Water Operating Fund $115k
The 2018 debt service levy is estimated to be as follows:
Amount % Change
2017 Debt Service Levy $5,809,864
Levy Adjustment for Existing Debt* 385,370 6.6%
Levy for New 2017A Bond Issue 493,882 8.5%
Subtotal 879,252 15.1%
Estimated 2018 Debt Service Levy $6,689,116
*Does not reflect the impact of any refunding opportunities.
The $879,252 increase in debt service levy represents a 3.30% increase based on the total
2017 property tax levy. The 2017 total tax levy will also be impacted by other adjustments to
2018 revenues and expenditures, service levels, project funding, etc.
Refunding Opportunities
Springsted Inc. will be discussing the following refunding opportunities:
• 2007H Street Reconstruction Bond
• 2009 Tax GO Street Reconstruction Bonds
• 2007 Liquor Revenue Bonds
Council Direction
Staff is seeking feedback regarding the 2017A bond issuance as well as the refunding of the
2007H Street Reconstruction Bond, 2009 Tax GO Street Reconstruction Bonds and the 2007
Liquor Revenue Bonds.
Attachment: Series 2017A Summary (2 pages)
$10,670,000 City of Lakeville, Minnesota General Obligation Bonds Series 2017A - Issue Summary
Total Issue Sources And Uses Dated 07/20/2017 | Delivered 07/20/2017
Street Reconstruction Levy
Street Reconstruction Assessment
Street Reconstruction Water
Holyoke Ave. Improvement Levy
Holyoke Ave. Improvement Assessment
Holyoke Ave. Improvement Light Fund Launch Park Assessment Issue Summary Sources Of Funds Par Amount of Bonds.....................................................................................................................................................................................$3,325,000.00 $2,405,000.00 $955,000.00 $1,175,000.00 $615,000.00 $455,000.00 $1,740,000.00 $10,670,000.00Reoffering Premium......................................................................................................................................................................................44,004.25 18,791.05 12,650.15 15,597.40 8,632.70 7,696.00 24,485.65 131,857.20Planned Issuer Equity contribution......................................................................................................................................................................50,000.00 ------50,000.00 Total Sources...........................................................................................................................................................................................$3,419,004.25 $2,423,791.05 $967,650.15 $1,190,597.40 $623,632.70 $462,696.00 $1,764,485.65 $10,851,857.20 Uses Of Funds Deposit to Project Construction Fund....................................................................................................................................................................3,312,419.00 2,345,319.00 950,178.00 1,153,619.40 606,564.50 453,884.67 1,711,711.00 10,533,695.57Total Underwriter's Discount (1.200%)..................................................................................................................................................................39,900.00 28,860.00 11,460.00 14,100.00 7,380.00 5,460.00 20,880.00 128,040.00Deposit to Capitalized Interest (CIF) Fund..............................................................................................................................................................41,366.09 35,231.54 -14,616.81 7,548.48 -21,357.51 120,120.43Costs of Issuance.......................................................................................................................................................................................21,813.50 15,777.88 6,265.23 7,708.53 4,034.68 2,985.00 11,415.18 70,000.00Rounding Amount.........................................................................................................................................................................................3,505.66 (1,397.37)(253.08)552.66 (1,894.96)366.33 (878.04)1.20 Total Uses..............................................................................................................................................................................................$3,419,004.25 $2,423,791.05 $967,650.15 $1,190,597.40 $623,632.70 $462,696.00 $1,764,485.65 $10,851,857.20
2017A GO Bonds | Issue Summary | 4/21/2017 | 3:34 PM
$10,670,000 City of Lakeville, Minnesota General Obligation Bonds Series 2017A - Issue Summary
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total Assessment Income Water Revenue Street Light Revenue Levy Required (Surplus)02/01/2018 --137,451.03 137,451.03 (120,120.43)17,330.60 18,197.13 -12,480.06 5,717.07 -02/01/2019 955,000.00 1.750%259,070.00 1,214,070.00 -1,214,070.00 1,274,773.50 599,593.70 112,772.63 68,525.63 493,881.5502/01/2020 960,000.00 2.250%242,357.50 1,202,357.50 -1,202,357.50 1,262,475.38 581,632.62 116,460.75 67,515.00 496,867.0102/01/2021 960,000.00 2.250%220,757.50 1,180,757.50 -1,180,757.50 1,239,795.38 563,671.56 114,334.50 66,215.63 495,573.6902/01/2022 965,000.00 2.250%199,157.50 1,164,157.50 -1,164,157.50 1,222,365.38 545,710.50 112,208.25 64,916.25 499,530.3802/01/2023 965,000.00 2.250%177,445.00 1,142,445.00 -1,142,445.00 1,199,567.25 527,749.44 115,332.00 63,616.88 492,868.9402/01/2024 970,000.00 2.250%155,732.50 1,125,732.50 -1,125,732.50 1,182,019.13 509,788.34 113,087.63 67,567.50 491,575.6602/01/2025 975,000.00 2.500%133,907.50 1,108,907.50 -1,108,907.50 1,164,352.88 491,827.28 116,093.25 66,150.00 490,282.3502/01/2026 985,000.00 2.500%109,532.50 1,094,532.50 -1,094,532.50 1,149,259.13 473,866.22 113,468.25 64,575.00 497,349.6502/01/2027 930,000.00 2.550%84,907.50 1,014,907.50 -1,014,907.50 1,065,652.88 455,905.16 116,093.25 -493,654.4702/01/2028 935,000.00 2.750%61,192.50 996,192.50 -996,192.50 1,046,002.13 437,944.06 113,281.88 -494,776.1902/01/2029 120,000.00 2.850%35,480.00 155,480.00 -155,480.00 163,254.00 182,284.80 --(19,030.80)02/01/2030 115,000.00 3.050%32,060.00 147,060.00 -147,060.00 154,413.00 176,208.64 --(21,795.64)02/01/2031 110,000.00 3.250%28,552.50 138,552.50 -138,552.50 145,480.13 170,132.48 --(24,652.35)02/01/2032 110,000.00 3.300%24,977.50 134,977.50 -134,977.50 141,726.38 164,056.32 --(22,329.94)02/01/2033 110,000.00 3.350%21,347.50 131,347.50 -131,347.50 137,914.88 157,980.16 --(20,065.29)02/01/2034 105,000.00 3.400%17,662.50 122,662.50 -122,662.50 128,795.63 151,904.00 --(23,108.38)02/01/2035 105,000.00 3.450%14,092.50 119,092.50 -119,092.50 125,047.13 145,827.84 --(20,780.71)02/01/2036 100,000.00 3.500%10,470.00 110,470.00 -110,470.00 115,993.50 139,751.68 --(23,758.18)02/01/2037 100,000.00 3.550%6,970.00 106,970.00 -106,970.00 112,318.50 133,675.52 --(21,357.02)02/01/2038 95,000.00 3.600%3,420.00 98,420.00 -98,420.00 103,341.00 127,599.36 --(24,258.36)Total $10,670,000.00 - $1,976,543.53 $12,646,543.53 (120,120.43) $12,526,423.10 $13,152,744.26 $6,737,109.68 $1,155,612.43 $534,798.95 $4,725,223.20
Dated...................................................................................................................................................................................................7/20/2017Delivery Date...........................................................................................................................................................................................7/20/2017First Coupon Date.......................................................................................................................................................................................2/01/2018 Yield Statistics Bond Year Dollars.......................................................................................................................................................................................$74,731.03Average Life............................................................................................................................................................................................7.004 YearsAverage Coupon..........................................................................................................................................................................................2.6448767% Net Interest Cost (NIC).................................................................................................................................................................................2.6397688%True Interest Cost (TIC)................................................................................................................................................................................2.6153866%Bond Yield for Arbitrage Purposes.......................................................................................................................................................................2.4247360%All Inclusive Cost (AIC)................................................................................................................................................................................2.7210396% IRS Form 8038 Net Interest Cost.......................................................................................................................................................................................2.4480125%Weighted Average Maturity...............................................................................................................................................................................6.976 Years2017A GO Bonds | Issue Summary | 4/21/2017 | 3:34 PM