HomeMy WebLinkAboutItem 8City of Lakeville
Finance Department
Memorandum
To: Mayor and Council
Justin Miller, City Administrator
From: Jerilyn Erickson, Finance Director
Date: April 22, 2019
Subject: 2019 Bond Issuance
The following projects are included in the 2019A bond issuance:
• #19-02 - 2019 Street Reconstruction
• #19-05 - Hamburg Avenue Improvements
• Lift Station #10 Rehabilitation
The 2019A bond issuance is estimated to be $9,020,000. It reflects the following:
1) Bond Structure – The term of the bonds is 10 years. The structure of the 2018A 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.
2) Hamburg Avenue – Special assessments for new watermain and private water service
are deferred for eight years without interest and will be funded internally by the City’s
Water Trunk Fund.
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 $589k . . . $596k
Water Operating Fund $92k . . . $98k
Sewer Operating Fund $65k . . . $70k
The 2020 debt service levy is estimated to be as follows:
Amount % Change
2019 Debt Service Levy $7,077,820
Levy Adjustment for Existing Debt 138,048 1.95%
Levy for New 2019 Bond Issue 591,535 8.36%
Subtotal 729,583 10.31%
Estimated 2020 Debt Service Levy $7,807,403
The $729,583 increase in debt service levy represents a 2.44% increase based on the total
2019 property tax levy. The 2020 total tax levy will also be impacted by other adjustments to
revenues and expenditures, service levels, project funding, etc.
Council Direction
Staff is seeking feedback regarding the 2019A bond issuance.
Attachment: Series 2019A Summary (xx pages)
City of Lakeville, Minnesota
Recommendations for Issuance of Bonds
$9,020,000 General Obligation Bonds, Series 2019A
The City Council has under consideration the issuance of bonds (the “Bonds”) to finance (i) various street
reconstruction projects (the “Street Reconstruction Portion”), (ii) related street improvements (the “Street
Imrovement Portion”), (iii) watermain improvements and sanitary sewer utility lift station improvements (the “Utility
Portion”) of the City. 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 3, 2019, 7:00 PM City Council considers Parameters Resolution
authorizing the Bond sale
Week of June 10, 2019 Rating conference is conducted
June 24, 2019, 10:00 AM Competitive proposals are received
June 24, 2019 City Official considers award of bonds with
authority delegated by Parameters Resolution
July 1, 2019, 7:00 PM City Council considers Resolution for ratification
July 24, 2019 Proceeds are received
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 'Aa1' by Moody’s.
THE MARKET: Performance of the tax-exempt market is often measured by the Bond Buyer’s Index (“BBI”)
which measures the yield of high grade municipal bonds in the 20th year for general obligation
bonds rated Aa2 by Moody’s or AA by S&P (the BBI 20-Bond GO Index) and the 30th year for
revenue bonds rated A1 by Moody’s or A+ by S&P (the BBI 25-Bond Revenue Index). The
following chart illustrates these two indices over the past five years.
Study No.: 0483.161 Date: April 19, 2019
Page 2
POST ISSUANCE
COMPLIANCE:
The issuance of the Bonds will result in post-issuance compliance responsibilities. The
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 this issue has been structured. Post-issuance compliance responsibilities
for this 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. Under
certain circumstances any “excess earnings” will need to be paid to the IRS to maintain
the tax-exempt status of the Bonds. Any interest earnings on gross bond proceeds or
debt service funds should not be spent until it has been determined based on actual facts
that they are not “excess earnings” as defined by the IRS Code.
The arbitrage rules provide for spend-down exceptions for proceeds that are spent within
either a 6-month, 18-month or, for certain construction issues, a 24-month period each in
accordance with certain spending criteria. Proceeds that qualify for an exception will be
exempt from rebate. These exceptions are based on actual expenditures and not based
on reasonable expectations, and expenditures, including any investment proceeds will
have to meet the spending criteria to qualify for the exclusion. The City expects to meet
the 18-month spending exception.
Regardless of whether the issue qualifies for an exemption from the rebate provisions,
yield restriction provisions will apply to Bond proceeds (including interest earnings)
unspent after three years and the debt service fund throughout the term of the Bonds.
These moneys should be monitored until the Bonds are retired.
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.
Baker Tilly currently provides both arbitrage and continuing disclosure services to the City.
Baker Tilly will work with City staff to include the Bonds under the existing respective
Agreement for Municipal Advisor Services.
RISKS/SPECIAL CONSIDERATIONS:
The outcome of this financing will rely on the market conditions at the time of the sale. Any
projections included herein are estimates based on current market conditions.
Principal payments have been structured around projected future assessment collections.
If actual assessment collections are different than projected (lower annual collections due
to delinquencies or prepayments), the levy requirements will differ from what is shown in
these Recommendations.
The Bonds have been structured illustrating additional proceeds generated from a premium
bid. There is no guaranty that the winning bidder will price this issue with a premium in the
amount estimated, which could result in an amount of proceeds that differ from what is
currently shown in the attached schedules, but the terms will require a minimum price of
par (100%).
Page 3
SCHEDULES
ATTACHED:
Schedules attached include the following:
• Sources and Uses of Funds
• Pricing Summary
• Net Debt Service as a whole and by purpose, given the current interest rate
environment.
• Estimated Aggregate Assessment Income
• Estimated Aggregate Utility Debt Service
SALE TERMS AND MARKETING:
Variability of Issue Size: A specific provision in the sale terms permits modifications to the
issue size and/or maturity structure to customize the issue once the price and interest rates
are set on the day of sale.
In the likely event the City receives a surplus premium bid for the Bonds, the City reserves
the right to make its final decision at the time of sale whether to keep any surplus bid
premium and how much for each purpose but intends to use any surplus premium to reduce
the par amount of the Bonds.
Prepayment Provisions: Bonds maturing on or after February 1, 2029 may be prepaid at
a price of par plus accrued interest on or after February 1, 2028.
Bank Qualification: The City expects to issue more than $10 million in tax-exempt
obligations in 2019; therefore, the Bonds are not currently designated as bank qualified.
However, upon determination by Bond Counsel that the planned 2019 financing
subsequently issued by the City will not affect the designation of the Bonds as bank
qualified, the City may choose to designate the Bonds as bank qualified prior to sale.
Bidding Parameters: Interest rates applied in the structuring of the Bonds are based on
current market conditions and assume a reoffering premium sufficient to compensate the
underwriter under premium bidding. In this case, premium bidding requires that an
underwriter bid not less than 100.00% (Par) of the face amount of the Bonds.
PARAMETER LIMITS: Pursuant to the Parameters Resolutions to be adopted by the Council on June 3, 2019,
the authority to award the sale of the Bonds will be delegated to Mayor and the City Clerk,
or the City Administrator alone, or any one or more authorized designees, designated by
its Council, who are authorized to award the Bonds on the day of sale subject to the
following parameters:
(i) the principal amount may not exceed an amount to be determined by the City prior to
its adoption of the Parameters Resolution plus the amount of premium received, and
(ii) the true interest cost may not exceed a rate to be determined by the City prior to its
adoption of the Parameters Resolution.
Page 4
SUPPLEMENTAL
INFORMATION AND
BOND RECORD:
Supplementary information will be available to staff including detailed terms and
conditions of sale, comprehensive structuring schedules and information to assist in
meeting post-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.
$4,670,000 Street Reconstruction Portion
Description of Portion
PURPOSE: Proceeds of the Street Reconstruction Portion will be used to finance a portion of the
street reconstruction projects related to the 2019 Reconstruction and Hamburg Avenue
projects.
AUTHORITY: Statutory Authority: The Street Reconstruction Portion is being issued pursuant to
Minnesota Statutes, Chapter 475 and Section 475.58 (Subd. 3b), and a Parameters
Resolution to be adopted June 3, 2019 (See Parameter Limits section for more detail).
Statutory Requirements: Pursuant to Minnesota Statutes, Section 475.58 (Subd. 3b), the
City must have a five-year Street Reconstruction Plan and comply with the public hearing
requirements. The City has complied with these requirements. The public hearing was
held on October 15, 2018.
SECURITY AND
SOURCE OF PAYMENT:
The Street Reconstruction Portion of the Bonds will be a general obligation of the City,
secured by its full faith and credit and taxing power. The Street Reconstruction Portion
will be paid from ad valorem property taxes.
In anticipation of the issuance of the Bonds, in 2018 the City levied taxes for 2019
collection in the amount of $55,000 for payment of a portion of the February 1, 2020
interest payment on the Street Reconstruction Portion of the Bonds. Thereafter, each
year’s collection of taxes will be used to make the August 1 interest payment due in the
collection year and the February 1 principal and interest payment due in the following
year. The February 1, 2020 interest payment will be made with capitalized interest net of
the anticipated levy collection included in the principal amount of the Street
Reconstruction Portion of the Bonds.
STRUCTURING SUMMARY:
In consultation with City Staff, the Street Reconstruction Portion of the Bonds has been
structured with two individual purposes according to the related projects to result in an
approximately level annual levy requirement over a repayment term of ten years.
Page 5
$3,065,000 Street Improvement Portion
Description of Portion
PURPOSE: Proceeds of the Street Improvement Portion will be used to finance street improvement
projects related to the 2019 Reconstruction and Hamburg Avenue projects.
AUTHORITY: Statutory Authority: The Street Improvement Portion is being issued pursuant to
Minnesota Statutes, Chapters 429 and 475, and a Parameters Resolution to be adopted
June 3, 2019 (See Parameter Limits section for more detail).
Statutory Requirements: Pursuant to Minnesota Statute 429, at least 20% of the City’s
share of the projected cost of the project must be paid from special assessments. The
projects being financed meet this requirement.
SECURITY AND
SOURCE OF PAYMENT:
The Street Improvement Portion of the Bonds will be a general obligation of the City,
secured by its full faith and credit and taxing power. The City will pledge special
assessments in the principal amount of $3,105,348 for repayment of this portion of the
Bonds. Assessments in the amount of $3,105,348, are expected to be filed in the fall of
2019 for first collection in 2020. The City anticipates they will receive some prepayments.
Any such prepaid assessments will be applied to (i) pay the interest due on February 1,
2020 and (ii) reduce the borrowing amount of the Street Improvement Portion of the Bonds.
The assessments will be collected over a term of ten and fifteen years with equal payments
of principal. Interest on the unpaid balance will be charged at a rate of 5.00%.
The detail of these assessments by term and project are listed below.
To the extent that prepaid assessments are not sufficient to pay the February 1, 2020
interest payment on the Improvement Portion of the Bonds, the City will use surplus
premium or Bond proceeds to capitalize the amount required to make the February 1, 2020
interest payment. The City does not anticipate the need to levy for repayment of this
portion of the Bonds.
STRUCTURING SUMMARY:
In consultation with City Staff, the Street Improvement Portion of the Bonds has been
structured with two individual purposes according to the related projects and accounting
for anticipated assessment collections to result in a level annual levy requirement over a
repayment term of ten years.
10 Years 15 Years
2019 Reconstruction Assessments $2,554,910 $402,318
Hamburg Avenue Assessments 148,120 -
Total Assessments $3,105,348
Page 6
$1,285,000 Utility Portion
Description of Portion
PURPOSE: Proceeds of the Utility Portion will be used to finance various utility improvements related
to the 2019 Reconstruction and Hamburg Avenue projects and the rehabilitation of a lift
station.
AUTHORITY: Statutory Authority: The Utility Portion is being issued pursuant to Minnesota Statutes,
Chapters 444 and 475, and a Parameters Resolution to be adopted June 3, 2019 (See
Parameter Limits section for more detail).
Statutory Requirements: Pursuant to Minnesota Statutes, Chapter 444 and the resolution
awarding the Bonds, the City will covenant to maintain water and sanitary sewer rates in
an amount sufficient to generate revenues to support the operation of the water and sewer
utility funds (together, the “Utility Fund”) and to pay debt service. The City is required to
annually review the budget of the Utility Fund to determine whether current rates and
charges are sufficient and to adjust them as necessary. The City has four issues
outstanding with all or a portion of debt service payable from the pledged net revenues of
the Utility Fund; the City’s $8,280,000 General Obligation Water Utility Revenue Bonds,
Series 2016A, the $6,570,000 Water and Sewer Fund portions of the City’s $22,250,000
General Obligation Bonds, Series 2016B, the $835,000 Water Fund portion of the City’s
$10,165,000 General Obligation Bonds, Series 2017A, and the $445,000 Water Fund
portion of the City’s $8,135,000 General Obligation Bonds, Series 2018A. Together, these
issues, and the anticipated debt service of the Utility Portion have an estimated maximum
annual debt service of $1,471,863. The most recent audited financial information of the
Utility Fund and coverage can be seen below
2017 Audited Utility Fund Revenues Operating Revenues $12,585,450
Operating Expenses 13,919,001
Net Operating Income -1,333,551
Add: Depreciation 4,295,521
Intergovernmental Grants 166,227
Interest Income 134,095
Net Revenues Available for Debt Service 3,262,292
Estimate Maximum Annual Debt Service $1,471,863
Estimated Remaining Net Revenues $1,790,430
Additionally, in 2018, the City hired a third-party consultant to assess the appropriate
structure and level of rates to fund operations and the replacement of infrastructure while
supporting ongoing debt service with the intent to minimize the use of bonds and maintain
an appropriate reserve level for the Utility Fund. Based upon recommendations by the
third-party consultant, in December of 2018 the City adopted and imposed a 5% rate
increase to Water System charges and an 8% increase to Sanitary Sewer System charges
and expects to continue to implement periodic utility rate increases such that revenues
will be sufficient to fund operations and pay debt service on obligations paid by the Utility
Fund.
Page 7
SECURITY AND
SOURCE OF PAYMENT:
The Utility Portion of the Bonds is a general obligation of the City, secured by its full faith
and credit and taxing power. In addition, the City will pledge net revenues of its Utility
Fund.
The City will use net revenues of its Utility Fund to pay the debt service on the Utility
Portion as it becomes due. The City does not anticipate a need to levy for this portion of
the Bonds.
STRUCTURING SUMMARY:
In consultation with City Staff, the Utility Portion of the Bonds has been structured to
provide approximately level annual debt service over a repayment term of ten years.
ADDITIONAL
INFORMATION:
The City also special assessed benefitted properties for new watermain and private water
service as part of the Hamburg Avenue project. These assessments are deferred and will
be funded internally by the City and will not be used as a source of repayment for the
Utility Portion of the Bonds, nor will this portion of the Hamburg Avenue project be funded
by proceeds of the Bonds.
Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP,
an accounting firm. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International
Ltd., the members of which are separate and independent legal entities.
Page 8
Preliminary
$9,020,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Issue Summary
Total Issue Sources And Uses
Dated 07/24/2019 | Delivered 07/24/2019
Street Reconstruction Portion Street Improvement Portion
2019
Reconstruction
Levy
Hamburg
Avenue Levy
2019
Reconstruction
Assessments
Hamburg
Avenue
Assessments
2019
Reconstruction
Water
Improvements
Lift
Rehabilitation
Sewer
Issue
Summary
Sources Of Funds
Par Amount of Bonds....................................$4,200,000.00 $470,000.00 $2,925,000.00 $140,000.00 $750,000.00 $535,000.00 $9,020,000.00
Reoffering Premium.......................................338,422.60 37,885.75 232,668.90 11,558.15 60,431.35 43,071.90 724,038.65
Total Sources.............................................$4,538,422.60 $507,885.75 $3,157,668.90 $151,558.15 $810,431.35 $578,071.90 $9,744,038.65
Uses Of Funds
Deposit to Project Construction Fund............4,146,238.00 457,821.00 2,848,158.00 136,095.00 744,557.00 530,000.00 8,862,869.00
Surplus Premium/Rounding...........................294,147.46 32,967.36 202,568.18 10,304.15 52,905.12 38,815.99 631,708.26
Deposit to Capitalized Interest (CIF) Fund.....27,202.08 9,194.17 57,840.14 2,805.00 --97,041.39
Total Underwriter's Discount (1.000%).......42,000.00 4,700.00 29,250.00 1,400.00 7,500.00 5,350.00 90,200.00
Costs of Issuance.........................................28,835.06 3,203.22 19,852.58 954.00 5,469.23 3,905.91 62,220.00
Total Uses...................................................$4,538,422.60 $507,885.75 $3,157,668.90 $151,558.15 $810,431.35 $578,071.90 $9,744,038.65
File | LAKEVILLE.SF | General Obligation Bonds, | Issue Summary | 4/18/2019 | 2:57 PM
Utility Portion
Page 9
Preliminary
$9,020,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Issue Summary
Pricing Summary
Maturity Type of Bond Coupon Yield Maturity
Value
Price YTM Call Date Call Price Dollar Price
02/01/2021 Serial Coupon 4.000%1.850%825,000.00 103.206% ---851,449.50
02/01/2022 Serial Coupon 4.000%1.900%825,000.00 105.142% ---867,421.50
02/01/2023 Serial Coupon 4.000%1.950%850,000.00 106.939% ---908,981.50
02/01/2024 Serial Coupon 4.000%2.000%870,000.00 108.601% ---944,828.70
02/01/2025 Serial Coupon 4.000%2.050%890,000.00 110.127% ---980,130.30
02/01/2026 Serial Coupon 4.000%2.100%910,000.00 111.519% ---1,014,822.90
02/01/2027 Serial Coupon 4.000%2.200%930,000.00 112.411% ---1,045,422.30
02/01/2028 Serial Coupon 4.000%2.250%950,000.00 113.498% ---1,078,231.00
02/01/2029 Serial Coupon 3.000%2.350%975,000.00 104.991%c 2.410%02/01/2028 100.000%1,023,662.25
02/01/2030 Serial Coupon 3.000%2.550%995,000.00 103.426%c 2.625%02/01/2028 100.000%1,029,088.70
Total ---$9,020,000.00 -----$9,744,038.65
Bid Information
Par Amount of Bonds.......................................................................................................................................................$9,020,000.00
Reoffering Premium or (Discount)....................................................................................................................................724,038.65
Gross Production..............................................................................................................................................................$9,744,038.65
Total Underwriter's Discount (1.000%)...........................................................................................................................$(90,200.00)
Bid (107.027%).................................................................................................................................................................9,653,838.65
Total Purchase Price.........................................................................................................................................................$9,653,838.65
Bond Year Dollars............................................................................................................................................................$55,935.39
Average Life.....................................................................................................................................................................6.201 Years
Average Coupon..............................................................................................................................................................3.6469444%
Net Interest Cost (NIC)......................................................................................................................................................2.5137822%
True Interest Cost (TIC)....................................................................................................................................................2.4119146%
File | LAKEVILLE.SF | General Obligation Bonds, | Issue Summary | 4/18/2019 | 2:57 PM
Page 10
Preliminary
$9,020,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Issue Summary
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total Assessment
Collections
105% Utilities
D/S
Net 105%
Overlevy
02/01/2020 --177,182.51 177,182.51 (97,041.39)80,141.12 84,148.18 -26,398.18 57,750.00
02/01/2021 825,000.00 4.000%341,100.00 1,166,100.00 -1,166,100.00 1,224,405.00 471,800.03 161,070.00 591,534.97
02/01/2022 825,000.00 4.000%308,100.00 1,133,100.00 -1,133,100.00 1,189,755.00 437,535.40 161,910.00 590,309.60
02/01/2023 850,000.00 4.000%275,100.00 1,125,100.00 -1,125,100.00 1,181,355.00 422,679.18 167,790.00 590,885.82
02/01/2024 870,000.00 4.000%241,100.00 1,111,100.00 -1,111,100.00 1,166,655.00 407,822.98 162,750.00 596,082.02
02/01/2025 890,000.00 4.000%206,300.00 1,096,300.00 -1,096,300.00 1,151,115.00 392,966.76 162,960.00 595,188.24
02/01/2026 910,000.00 4.000%170,700.00 1,080,700.00 -1,080,700.00 1,134,735.00 378,110.56 162,960.00 593,664.44
02/01/2027 930,000.00 4.000%134,300.00 1,064,300.00 -1,064,300.00 1,117,515.00 363,254.34 162,750.00 591,510.66
02/01/2028 950,000.00 4.000%97,100.00 1,047,100.00 -1,047,100.00 1,099,455.00 348,398.14 162,330.00 588,726.86
02/01/2029 975,000.00 3.000%59,100.00 1,034,100.00 -1,034,100.00 1,085,805.00 333,541.92 161,700.00 590,563.08
02/01/2030 995,000.00 3.000%29,850.00 1,024,850.00 -1,024,850.00 1,076,092.50 318,685.72 167,632.50 589,774.28
02/01/2031 -------33,526.50 -(33,526.50)
02/01/2032 -------32,185.44 -(32,185.44)
02/01/2033 -------30,844.38 -(30,844.38)
02/01/2034 -------29,503.32 -(29,503.32)
02/01/2035 -------28,162.26 -(28,162.26)
Total $9,020,000.00 -$2,039,932.51 $11,059,932.51 (97,041.39)$10,962,891.12 $11,511,035.68 $4,029,016.93 $1,660,250.68 $5,821,768.07
Dated........................................................................................................................................................................................................................................................7/24/2019
Delivery Date............................................................................................................................................................................................................................................7/24/2019
First Coupon Date....................................................................................................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars....................................................................................................................................................................................................................................$55,935.39
Average Life............................................................................................................................................................................................................................................6.201 Years
Average Coupon......................................................................................................................................................................................................................................3.6469444%
Net Interest Cost (NIC).............................................................................................................................................................................................................................2.5137822%
True Interest Cost (TIC)............................................................................................................................................................................................................................2.4119146%
Bond Yield for Arbitrage Purposes..........................................................................................................................................................................................................2.2078251%
All Inclusive Cost (AIC)............................................................................................................................................................................................................................2.5295949%
IRS Form 8038
Net Interest Cost......................................................................................................................................................................................................................................2.1717546%
Weighted Average Maturity.....................................................................................................................................................................................................................6.218 Years
File | LAKEVILLE.SF | General Obligation Bonds, | Issue Summary | 4/18/2019 | 2:57 PM
Page 11
Preliminary
$4,200,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
2019 Reconstruction - Street Reconstruction Portion
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I CIF Net New D/S 105%
Overlevy
02/01/2020 --82,202.08 82,202.08 (27,202.08)55,000.00 57,750.00
02/01/2021 350,000.00 4.000%158,250.00 508,250.00 -508,250.00 533,662.50
02/01/2022 365,000.00 4.000%144,250.00 509,250.00 -509,250.00 534,712.50
02/01/2023 380,000.00 4.000%129,650.00 509,650.00 -509,650.00 535,132.50
02/01/2024 395,000.00 4.000%114,450.00 509,450.00 -509,450.00 534,922.50
02/01/2025 410,000.00 4.000%98,650.00 508,650.00 -508,650.00 534,082.50
02/01/2026 425,000.00 4.000%82,250.00 507,250.00 -507,250.00 532,612.50
02/01/2027 440,000.00 4.000%65,250.00 505,250.00 -505,250.00 530,512.50
02/01/2028 460,000.00 4.000%47,650.00 507,650.00 -507,650.00 533,032.50
02/01/2029 480,000.00 3.000%29,250.00 509,250.00 -509,250.00 534,712.50
02/01/2030 495,000.00 3.000%14,850.00 509,850.00 -509,850.00 535,342.50
Total $4,200,000.00 -$966,702.08 $5,166,702.08 (27,202.08)$5,139,500.00 $5,396,475.00
SIGNIFICANT DATES
Dated Date.................................................................................................................................................................7/24/2019
Delivery Date.............................................................................................................................................................7/24/2019
First Coupon Date......................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars.....................................................................................................................................................$26,611.67
Average Life..............................................................................................................................................................6.336 Years
Average Coupon.......................................................................................................................................................3.6326251%
Net Interest Cost (NIC)...............................................................................................................................................2.5187430%
True Interest Cost (TIC).............................................................................................................................................2.4171740%
Bond Yield for Arbitrage Purposes...........................................................................................................................2.2078251%
All Inclusive Cost (AIC)..............................................................................................................................................2.5319763%
IRS Form 8038
Net Interest Cost........................................................................................................................................................2.1802589%
Weighted Average Maturity.......................................................................................................................................6.350 Years
File | LAKEVILLE.SF | General Obligation Bonds, | 2019 Reconstruction - Lev | 4/18/2019 | 2:57 PM
Page 12
Preliminary
$470,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Hamburg Avenue - Street Reconstruction Portion
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I CIF Net New D/S 105%
Overlevy
02/01/2020 --9,194.17 9,194.17 (9,194.17)--
02/01/2021 40,000.00 4.000%17,700.00 57,700.00 -57,700.00 60,585.00
02/01/2022 40,000.00 4.000%16,100.00 56,100.00 -56,100.00 58,905.00
02/01/2023 40,000.00 4.000%14,500.00 54,500.00 -54,500.00 57,225.00
02/01/2024 45,000.00 4.000%12,900.00 57,900.00 -57,900.00 60,795.00
02/01/2025 45,000.00 4.000%11,100.00 56,100.00 -56,100.00 58,905.00
02/01/2026 50,000.00 4.000%9,300.00 59,300.00 -59,300.00 62,265.00
02/01/2027 50,000.00 4.000%7,300.00 57,300.00 -57,300.00 60,165.00
02/01/2028 50,000.00 4.000%5,300.00 55,300.00 -55,300.00 58,065.00
02/01/2029 55,000.00 3.000%3,300.00 58,300.00 -58,300.00 61,215.00
02/01/2030 55,000.00 3.000%1,650.00 56,650.00 -56,650.00 59,482.50
Total $470,000.00 -$108,344.17 $578,344.17 (9,194.17)$569,150.00 $597,607.50
SIGNIFICANT DATES
Dated Date...................................................................................................................................................................7/24/2019
Delivery Date...............................................................................................................................................................7/24/2019
First Coupon Date........................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars.......................................................................................................................................................$2,984.14
Average Life................................................................................................................................................................6.349 Years
Average Coupon.........................................................................................................................................................3.6306678%
Net Interest Cost (NIC).................................................................................................................................................2.5185966%
True Interest Cost (TIC)...............................................................................................................................................2.4171021%
Bond Yield for Arbitrage Purposes.............................................................................................................................2.2078251%
All Inclusive Cost (AIC)................................................................................................................................................2.5308387%
IRS Form 8038
Net Interest Cost..........................................................................................................................................................2.1804674%
Weighted Average Maturity.........................................................................................................................................6.362 Years
File | LAKEVILLE.SF | General Obligation Bonds, | Hamburg Avenue - Levy | 4/18/2019 | 2:57 PM
Page 13
Preliminary
$2,925,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
2019 Reconstruction - Street Improvement Portion
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total Assessment Levy
Required
02/01/2020 --57,840.14 57,840.14 (57,840.14)----
02/01/2021 315,000.00 4.000%111,350.00 426,350.00 -426,350.00 447,667.50 448,656.28 (988.78)
02/01/2022 295,000.00 4.000%98,750.00 393,750.00 -393,750.00 413,437.50 416,058.00 (2,620.50)
02/01/2023 295,000.00 4.000%86,950.00 381,950.00 -381,950.00 401,047.50 401,942.38 (894.88)
02/01/2024 295,000.00 4.000%75,150.00 370,150.00 -370,150.00 388,657.50 387,826.78 830.72
02/01/2025 295,000.00 4.000%63,350.00 358,350.00 -358,350.00 376,267.50 373,711.16 2,556.34
02/01/2026 290,000.00 4.000%51,550.00 341,550.00 -341,550.00 358,627.50 359,595.56 (968.06)
02/01/2027 290,000.00 4.000%39,950.00 329,950.00 -329,950.00 346,447.50 345,479.94 967.56
02/01/2028 285,000.00 4.000%28,350.00 313,350.00 -313,350.00 329,017.50 331,364.34 (2,346.84)
02/01/2029 285,000.00 3.000%16,950.00 301,950.00 -301,950.00 317,047.50 317,248.72 (201.22)
02/01/2030 280,000.00 3.000%8,400.00 288,400.00 -288,400.00 302,820.00 303,133.12 (313.12)
02/01/2031 -------33,526.50 (33,526.50)
02/01/2032 -------32,185.44 (32,185.44)
02/01/2033 -------30,844.38 (30,844.38)
02/01/2034 -------29,503.32 (29,503.32)
02/01/2035 -------28,162.26 (28,162.26)
Total $2,925,000.00 -$638,590.14 $3,563,590.14 (57,840.14)$3,505,750.00 $3,681,037.50 $3,839,238.18 (158,200.68)
Dated...............................................................................................................................................................................................................7/24/2019
Delivery Date...................................................................................................................................................................................................7/24/2019
First Coupon Date............................................................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars...........................................................................................................................................................................................$17,379.38
Average Life...................................................................................................................................................................................................5.942 Years
Average Coupon.............................................................................................................................................................................................3.6744137%
Net Interest Cost (NIC).....................................................................................................................................................................................2.5039522%
True Interest Cost (TIC)...................................................................................................................................................................................2.4016725%
Bond Yield for Arbitrage Purposes.................................................................................................................................................................2.2078251%
All Inclusive Cost (AIC)....................................................................................................................................................................................2.5221634%
IRS Form 8038
Net Interest Cost..............................................................................................................................................................................................2.1549121%
Weighted Average Maturity.............................................................................................................................................................................5.965 Years
File | LAKEVILLE.SF | General Obligation Bonds, | 2019 Reconstruction - As | 4/18/2019 | 2:57 PM
Page 14
Preliminary
$140,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Hamburg Avenue - Street Improvement Portion
NET DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of
Total
Assessment Levy
Required
02/01/2020 --2,805.00 2,805.00 (2,805.00)----
02/01/2021 15,000.00 4.000%5,400.00 20,400.00 -20,400.00 21,420.00 23,143.75 (1,723.75)
02/01/2022 15,000.00 4.000%4,800.00 19,800.00 -19,800.00 20,790.00 21,477.40 (687.40)
02/01/2023 15,000.00 4.000%4,200.00 19,200.00 -19,200.00 20,160.00 20,736.80 (576.80)
02/01/2024 15,000.00 4.000%3,600.00 18,600.00 -18,600.00 19,530.00 19,996.20 (466.20)
02/01/2025 15,000.00 4.000%3,000.00 18,000.00 -18,000.00 18,900.00 19,255.60 (355.60)
02/01/2026 15,000.00 4.000%2,400.00 17,400.00 -17,400.00 18,270.00 18,515.00 (245.00)
02/01/2027 15,000.00 4.000%1,800.00 16,800.00 -16,800.00 17,640.00 17,774.40 (134.40)
02/01/2028 15,000.00 4.000%1,200.00 16,200.00 -16,200.00 17,010.00 17,033.80 (23.80)
02/01/2029 10,000.00 3.000%600.00 10,600.00 -10,600.00 11,130.00 16,293.20 (5,163.20)
02/01/2030 10,000.00 3.000%300.00 10,300.00 -10,300.00 10,815.00 15,552.60 (4,737.60)
Total $140,000.00 -$30,105.00 $170,105.00 (2,805.00)$167,300.00 $175,665.00 $189,778.75 (14,113.75)
Dated..............................................................................................................................................................................................7/24/2019
Delivery Date..................................................................................................................................................................................7/24/2019
First Coupon Date..........................................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars..........................................................................................................................................................................$802.72
Average Life..................................................................................................................................................................................5.734 Years
Average Coupon............................................................................................................................................................................3.7503633%
Net Interest Cost (NIC)...................................................................................................................................................................2.4849007%
True Interest Cost (TIC)..................................................................................................................................................................2.3774324%
Bond Yield for Arbitrage Purposes................................................................................................................................................2.2078251%
All Inclusive Cost (AIC)..................................................................................................................................................................2.5019748%
IRS Form 8038
Net Interest Cost............................................................................................................................................................................2.1217203%
Weighted Average Maturity...........................................................................................................................................................5.768 Years
File | LAKEVILLE.SF | General Obligation Bonds, | Hamburg Avenue - Assessme | 4/18/2019 | 2:57 PM
Page 15
Preliminary
$750,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
2019 Reconstruction - Water System Improvements
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I 105% D/S
02/01/2020 --14,674.31 14,674.31 15,408.03
02/01/2021 60,000.00 4.000%28,250.00 88,250.00 92,662.50
02/01/2022 65,000.00 4.000%25,850.00 90,850.00 95,392.50
02/01/2023 70,000.00 4.000%23,250.00 93,250.00 97,912.50
02/01/2024 70,000.00 4.000%20,450.00 90,450.00 94,972.50
02/01/2025 75,000.00 4.000%17,650.00 92,650.00 97,282.50
02/01/2026 75,000.00 4.000%14,650.00 89,650.00 94,132.50
02/01/2027 80,000.00 4.000%11,650.00 91,650.00 96,232.50
02/01/2028 80,000.00 4.000%8,450.00 88,450.00 92,872.50
02/01/2029 85,000.00 3.000%5,250.00 90,250.00 94,762.50
02/01/2030 90,000.00 3.000%2,700.00 92,700.00 97,335.00
Total $750,000.00 -$172,824.31 $922,824.31 $968,965.53
SIGNIFICANT DATES
Dated...........................................................................................................................................................................7/24/2019
Delivery Date...............................................................................................................................................................7/24/2019
First Coupon Date.......................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars.......................................................................................................................................................$4,759.58
Average Life...............................................................................................................................................................6.346 Years
Average Coupon.........................................................................................................................................................3.6310807%
Net Interest Cost (NIC)................................................................................................................................................2.5189802%
True Interest Cost (TIC)...............................................................................................................................................2.4176187%
Bond Yield for Arbitrage Purposes.............................................................................................................................2.2078251%
All Inclusive Cost (AIC)...............................................................................................................................................2.5394131%
IRS Form 8038
Net Interest Cost.........................................................................................................................................................2.1811371%
Weighted Average Maturity........................................................................................................................................6.358 Years
Interest rates are estimates. Changes in rates may
cause significant alterations to this schedule.
The actual underwriter's discount bid may also vary.
File | LAKEVILLE.SF | General Obligation Bonds, | 2019 Reconstruction - Wat | 4/18/2019 | 2:57 PM
Page 16
Preliminary
$535,000
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Lift Rehabilitation -Sanitary Sewer Improvements
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I 105% D/S
02/01/2020 --10,466.81 10,466.81 10,990.15
02/01/2021 45,000.00 4.000%20,150.00 65,150.00 68,407.50
02/01/2022 45,000.00 4.000%18,350.00 63,350.00 66,517.50
02/01/2023 50,000.00 4.000%16,550.00 66,550.00 69,877.50
02/01/2024 50,000.00 4.000%14,550.00 64,550.00 67,777.50
02/01/2025 50,000.00 4.000%12,550.00 62,550.00 65,677.50
02/01/2026 55,000.00 4.000%10,550.00 65,550.00 68,827.50
02/01/2027 55,000.00 4.000%8,350.00 63,350.00 66,517.50
02/01/2028 60,000.00 4.000%6,150.00 66,150.00 69,457.50
02/01/2029 60,000.00 3.000%3,750.00 63,750.00 66,937.50
02/01/2030 65,000.00 3.000%1,950.00 66,950.00 70,297.50
Total $535,000.00 -$123,366.81 $658,366.81 $691,285.15
SIGNIFICANT DATES
Dated...........................................................................................................................................................................7/24/2019
Delivery Date...............................................................................................................................................................7/24/2019
First Coupon Date.......................................................................................................................................................2/01/2020
Yield Statistics
Bond Year Dollars.......................................................................................................................................................$3,397.90
Average Life...............................................................................................................................................................6.351 Years
Average Coupon.........................................................................................................................................................3.6306751%
Net Interest Cost (NIC)................................................................................................................................................2.5205227%
True Interest Cost (TIC)...............................................................................................................................................2.4189972%
Bond Yield for Arbitrage Purposes.............................................................................................................................2.2078251%
All Inclusive Cost (AIC)...............................................................................................................................................2.5408632%
IRS Form 8038
Net Interest Cost.........................................................................................................................................................2.1824722%
Weighted Average Maturity........................................................................................................................................6.364 Years
Interest rates are estimates. Changes in rates may
cause significant alterations to this schedule.
The actual underwriter's discount bid may also vary.
File | LAKEVILLE.SF | General Obligation Bonds, | Lift Rehabilitation - Sew | 4/18/2019 | 2:57 PM
Page 17
Preliminary
$3,105,348
The City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Issue Summary
ASSESSMENT INCOME -- Accrual Basis
Calendar
Year
Principal Coupon Interest Total P+I
2019 ----
2020 297,124.20 5.000%174,675.83 471,800.03
2021 297,124.20 5.000%140,411.20 437,535.40
2022 297,124.20 5.000%125,554.98 422,679.18
2023 297,124.20 5.000%110,698.78 407,822.98
2024 297,124.20 5.000%95,842.56 392,966.76
2025 297,124.20 5.000%80,986.36 378,110.56
2026 297,124.20 5.000%66,130.14 363,254.34
2027 297,124.20 5.000%51,273.94 348,398.14
2028 297,124.20 5.000%36,417.72 333,541.92
2029 297,124.20 5.000%21,561.52 318,685.72
2030 26,821.20 5.000%6,705.30 33,526.50
2031 26,821.20 5.000%5,364.24 32,185.44
2032 26,821.20 5.000%4,023.18 30,844.38
2033 26,821.20 5.000%2,682.12 29,503.32
2034 26,821.20 5.000%1,341.06 28,162.26
-$3,105,348.00 -$923,668.93 $4,029,016.93
SIGNIFICANT DATES
Filing Date..................................................................................................................................................................11/16/2019
First Payment Date....................................................................................................................................................12/31/2020
File | LAKEVILLE.SF | Series 2019A - Assessment | Issue Summary | 4/17/2019 | 2:09 PM
Page 18
City of Lakeville, Minnesota
General Obligation Bonds, Series 2019A
Aggregate Utility Debt Service
DATE 2016A GO
Utility Rev
Bonds
2016B GO
Bonds
Water Portion
2016B GO
Bonds
Sewer
Portion
2017A GO
Bonds
Water Portion
2018A GO
Bonds
Water Portion
2019A GO
Bonds
Water Portion
(Estimated)
2019A GO
Bonds
Sewer Portion
(Estimated)
TOTAL
2019 614,325.00 527,212.50 71,575.00 91,275.00 19,469.17 --1,323,856.67
2020 610,700.00 534,587.50 73,700.00 103,150.00 53,275.00 28,799.31 20,541.81 1,404,211.81
2021 611,200.00 537,612.50 71,750.00 104,525.00 56,400.00 87,050.00 64,250.00 1,468,537.50
2022 610,700.00 535,912.50 75,650.00 105,650.00 54,400.00 89,550.00 62,450.00 1,471,862.50
2023 609,200.00 527,312.50 73,375.00 101,650.00 52,900.00 91,850.00 65,550.00 1,456,287.50
2024 611,575.00 527,312.50 70,125.00 102,525.00 56,275.00 89,050.00 63,550.00 1,456,862.50
2025 620,050.00 526,312.50 71,750.00 103,150.00 54,025.00 91,150.00 61,550.00 1,466,437.50
2026 615,200.00 528,812.50 -103,525.00 51,775.00 88,150.00 64,450.00 1,387,462.50
2027 585,500.00 378,962.50 -104,650.00 54,400.00 90,050.00 62,250.00 1,213,562.50
2028 580,650.00 377,712.50 -106,575.00 52,400.00 86,850.00 64,950.00 1,204,187.50
2029 583,125.00 379,687.50 --55,825.00 88,975.00 62,850.00 1,107,612.50
2030 578,125.00 379,787.50 ---91,350.00 65,975.00 1,049,262.50
2031 577,750.00 379,587.50 -----957,337.50
2032 581,850.00 379,087.50 -----960,937.50
2033 580,425.00 378,287.50 -----958,712.50
2034 578,550.00 253,906.25 -----832,456.25
2035 --------
Total $9,548,925.00 $7,152,093.75 $507,925.00 $1,026,675.00 $561,144.17 $922,824.31 $658,366.81 $19,719,587.23
Par Amounts Of Selected Issues
2016A GO Utility Rev Bonds...............................................................................................................................................................................................................................................8,280,000.00
2016B Water Fund Portion..................................................................................................................................................................................................................................................6,075,000.00
2017A Water Fund Portion.................................................................................................................................................................................................................................................835,000.00
2018A Water Fund Portion.................................................................................................................................................................................................................................................445,000.00
2019A Water Fund Portion.................................................................................................................................................................................................................................................750,000.00
2016B Sewer Fund Portion................................................................................................................................................................................................................................................495,000.00
2019A Sewer Fund Portion................................................................................................................................................................................................................................................535,000.00
TOTAL................................................................................................................................................................................................................................................................................17,415,000.00
Aggregate | 4/19/2019 | 11:13 AM