09-26-2016 Council Packet - Laserfiche WebLink

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Bonding The City's bonding authority is governed by state and federal regulations. The refunding of the 2008 bonds is pretty straight forward. The process can be started upon the passing of a resolution to set the bond sale date. There are no public hearing requirements and the entire process from authorization to closing is about two months. A resolution authorizing the refunding bond issue is on tonight's agenda. A timeline for the refunding is included in attachment 2. The issuance of street reconstruction bonds has additional requirements and will take around three months to complete. The street bonds are issued under Minnesota Statutes, Section 475.58, Subdivision 3b which requires the City to adopt a 5 -year street reconstruction plan prior to issuing the bonds. The adoption of the reconstruction plan requires a public hearing and a unanimous vote of the council. Once the plan is approved and the bond sale is authorized, there is a 30 day period in which citizens could petition for a reverse referendum on the bond sale. A timeline for the issuance of street reconstruction bonds is included in attachment 3. If the Council is interested in issuing street reconstruction bonds, it is advantageous to issue these bonds in conjunction with the refunding bond issue. Ehlers and Associates, the City's fiscal agents, estimate that by combining the two bond issues the city will save $24,000 in issuance costs. Because smaller bond issues tend to receive fewer bids, combining the two issues into one larger issue should create a more competitive bidding environment and has the potential to result in lower interest rates. If the Council authorizes the sale of street reconstruction bonds, it could be advantageous to issue additional bonds to fund projects scheduled in future years. Information on road funding needs is included in attachment 4. Request for Council Action The primary decision is to confirm the size of the preliminary tax levy that will be approved on September 26. Once the preliminary levy is approved, it cannot be increased. Council could also direct staff to make changes to the General Fund budget if desired. If the Council wishes to issue Pavement Management Bonds, the Council should consider a motion to call for a public hearing to be held on October 10, 2016 at 7:00 p.m. at City Hall in connection with the adoption of the City's Five -Year Street Reconstruction Plan and its intention to issue up to the decided upon amount of General Obligation Street Reconstruction Bonds to finance street improvements as identified in said plan. City staff is directed to cause the notice to be published in the official newspaper of the city at least 10 but not more than 28 days before the hearing. Attachments: 1) Work Session Memo — 8/22/16 2) Bonding Information — Refunding 3) Bonding Information — Pavement Management Bonds 4) Road Funding Needs 2017 Preliminary Budget & Tax Levy Attachment 1- Page 2 9/12/16 Memo