8A3

CITY OF WOODBURY, MINNESOTA

Office of City Administrator

Council Letter No. 13-29

January 23, 2013

TO:	The Honorable Mayor and Members of the City Council
FROM:	Clinton P. Gridley, City Administrator
SUBJECT:	$16,845,000 Taxable G.O. Tax Abatement Bonds, Series 2013A $6,870,000 G.O. Park and Open Space Refunding Bonds, Series 2013B

SUMMARY

At the December 12, 2012 meeting the City Council set a bid date of January 23, 2013 at 10:00 A.M. for the bond sale.  The bids will be opened in Ehler's offices and the results will be forwarded to the City.  The City’s bond rating was reviewed by Standard and Poors and our AAA rating was confirmed.  Results from the bond sale and the final resolutions will be provided at the Council meeting on January 23.

The Bonds will be subject to continuing disclosure requirements and Federal Arbitrage and Rebate reporting.  We have been contracting with Ehlers to assist us with these requirements for other bond issues and would recommend we do so with these issues as well.

Included with this council letter is a copy of the official statement that was prepared for the sale of the debt issues. The official statement was transmitted to all bidders and to Standard and Poors for the purpose of rating the bonds, evaluating the present debt structure, administration of the City and reviewing other risk factors.  

$16,845,000 Taxable G.O. Tax Abatement Bonds, Series 2013A

The proceeds of the Tax Abatement Bonds will be used to finance the Bielenberg Sports Center Improvements. The Tax Abatement Bonds will be repaid from property taxes per the BSC Tax Abatement Plan.

The financing method involves the utilization of the existing Park and Open Space debt levies for the project.  City voters have approved two previous referendums for BSC:  one in 1994 to construct the field house and first sheet of ice, and a second in 2005 to construct the outdoor fields and purchase open space.  The Series 1994D General Obligation (G.O.) bonds will be paid off February 1, 2015, and the Series 1998E G.O. bonds will be paid off February 1, 2019.  The 1998E G.O. bonds were issued out of an open space referendum. 

Council Letter No. 13-29

January 23, 2013

Page 2

The City will reduce the existing levies referenced above to offset the “new” abatement levy.  The tax abatement revenues will be timed to commence at the same time as the expiring debt levies.

$6,870,000 G.O. Park and Open Space Refunding Bonds, Series 2013B

The proceeds of the Refunding Bonds will be used to refund the G.O. Parks and Open Space Bonds, Series 2006B at the call date on February 1, 2015.  The refunded bond issues will continue to be supported by a property tax levy. 

Based on current interest rate estimates, the refunding is projected to result in the City realizing a total future value savings of approximately $716,000, with a net present value benefit to the City of approximately $613,000.

RECOMMENDATION

Staff recommends Council adopt the attached resolutions.  It is also recommended the Mayor and Administrator be authorized to enter into an agreement with Ehlers for arbitrage calculations and the continuing disclosure requirements of the bonds.

Written By:	Tim Johnson, Finance Director
Approved Through:	Clinton P. Gridley, City Administrator
Attachments:	Resolutions Official Statement