HomeMy WebLinkAbout04-06-09 Worksession Handouts City of Oak Park Heights
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a
Memo
April 6, 2009
To: Mayor & Council
From: Judy Holst, Finance Director
You will have several options for funding the additional estimate of $1,254,094 needed to fund the City
Hall Project.
1. Fund the proiect internally 100%
Budgeted Projects Fund — Outdoor Storage $65,000
Budgeted Projects Fund — Municipal Building $160,989
Budgeted Projects Fund — Unallocated $89,941
Storm Sewer Fund (pond and storm sewer lines) $75,000
Park Dedication Fund (new trail, prairie & green space restoration $100,000
Reallocate Next Year's Transfer Out to Street Reconstruction $320,000
Capital Revolving Fund $443.164
Total $1,254,094
You have the option of paying back the Capital Revolving Fund over a period of years with
interest.
2. Fund the proiect part internal Citv funds and part bonding
Budgeted Projects Fund — Outdoor Storage $65,000
Budgeted Projects Fund — Municipal Building $160,989
Budgeted Projects Fund — Unallocated $89,941
Storm Sewer Fund (pond and storm sewer lines) $75,000
Park Dedication Fund (new trail, prairie & green space restoration $100,000
Bonds $763.000
Total $1,253,930
3. 100% Bonding $1,200,000
1 calculated rough numbers on the bonding costs versus the loss interest costs to the City for
$1,200,000.
Bonding Costs over 20 years
Northland's estimate of Interest on $1,200,000 bond issue $635,683.75
Northland's estimate of soft costs of issuance $63,313.13
Estimate of lost interest on $1,200,000 until paid by tax levy $189,363.00
Total Bonding Costs $888,359.88
Estimate of Lost Interest on $1,200,000 assuming a yield of 4%
per year for 20 years $960,000.00
I F n R• OPH CITY HALL (CIP) 2009 M2 CITY OF OAK PARK HEIGHTS, MINNESOTA
DATE OF ANALYSIS: APRIL 6, 2009 GENERAL OBLIGATION CAPITAL RkIPROVEMENT BONDS OF 2009A CITY HALL PROJECT
DATED DATE OF ISSUE: JUNE I5, 2009 PARAMOUNT: $1,200,000
(A) (B) (C) (D) (E) (F) (G) (9 (n 00 W (63) IN) ( (P) (0) (R) (S)
ANNUAL TAX! MARKET VALUEAOMESTEAD I COhDMMaALI
EST. 2009 2009 ANNUAL TAXCAPACITY CAPICITY $100,000 5150,000 5200,000 5250,000 $350,000 5500,000 5500,000
(12.15) INTEREST DEBT CAPITALIED TAX SURPLUS CUMULATIVE VALUE,( RATE TAX CAPACITY VALUE
YEAR PRINCIPAL RATES INTEREST SERVICE INTEREST LEVY /DEFICIT BALANCEI 2,50!:1 INCRBASEI SLOW $1,500 $1000 $2.500 $3500 $5.000 1 $9.250
2008 0.00 0.00 9,274,811
2009 23,206,75 23,208.75 $34,813.13 11,604,38 11,604.38 9,506,681 0.00007. 0,00 0.00 0.00 0.00 0.00 0.00 0.00
2010 35,000.00 1.80% 46,417.50 81,417.50 86,000.00 4,582.50 16,186.88 9,744,348 0,8826% 8.83 132A 17.65 22.06 30.89 44.13 81,64
2011 35,000.00 2.00% 45,787.50 50,787.50 87,000.00 6,212,50 22,399.38 9,987,957 0,8710 8,71 13.07 17.42 21.78 30.49 43.55 80.57
2012 40,000.00 2,15% 45,087.50 85,087.50 88,000.00 2,912.50 25,311,88 10,237,656 0,8596% 8.60 12.89 17.19 21.49 30.09 42.98 79.51
2013 40,000.00 2,35% 44,227.50 64,227.50 89,000.00 4,772.50 30,084.36 10,493,597 0.8461 8,48 12.72 16.96 21.20 29.68 4141 78.45
2014 45,000.00 160% 43,287.50 85,287.$0 90,000.00 1,712.50 31,796.88 10,755,937 0.8367% 8.37 12.55 16.73 20.92 29.29 41.84 77.40
2015 45,000.00 2.80% 42,117.50 87,117.50 91,000.00 3,882.50 35,679.38 11,024,836 0.8254% 8.25 12.38 16.51 20.64 28.89 41.27 76.35
2016 50,00400 3.00% 40,857.50 90,857.50 9$000.00 1,142.50 36,821,88 11,300,457 0.6141% 6,14 12.21 16.28 20.35 28.49 40.71 75.31
2017 $0,000.00 3.25% 39,357.50 89,357.50 93,000.00 3,642.50 40,464.38 11,582,968 0,6029 8.03 12.04 16.06 20.07 28.10 40.15 74.27
2018 55,000.00 3,50% 37,732.50 92,732.50 94,000.00 1,267.50 41,731.88 11,872,542 0.7917% 7.92 11.88 15,83 19.79 27.71 39.59 73.24
2019 55,00400 3,75% 35,807.30 90,807.50 95,000.00 4,192.50 45,974.38 12,169,356 0.7806% 7.81 11.71 15.61 19.52 27.32 39.03 7221
2020 K000.00 4,00% 33,745,00 93,745.00 96,000.00 2,255.00 48,179.38 12,473,590 0.7691W. 7.70 11.54 15.39 19.24 26.94 38,48 71.19
2021 65,000.00 4.15% 31,345.00 96,345.00 97,000.00 655.00 48,S34.38. 12,785,429 0.7587% 7.59 11,38 15.17 18.97 26.55 37.93 70.18
2022 70,000.00 4.25% 2$647.50 98,647,50 98,000.00 (647.$0) 48,186.86 13,105,065 0.7478% 7.48 11.22 14.% 18.70 26.17 37.39 69.17
2023 75,000.00 4,35% 25,672,50 100,672.50 99,000.00 (1,672.50) 46,514.38 13,432,692 0.7370% 7.37 11.06 14.74 18.43 25.60 36.85 68.17
2024 80,000,00 4.45% 22,410.00 102,410.00 100,000.00 (2,410.00) 44,104.38 13,765,509 0.7263% 7.26 10.89 14.53 1$16 25.42 36.31 67,18
2025 85,000.00 4.S5% 58,85800 103,830.00 101,000.00 (2,850.00) 41,254.36 14,112,722 0.715796 7.16 10.73 14.31 17.89 25.05 35.78 66.20
2026 95,000.00 4.65% 14,98150 109,98150 102,000,00 (7,982.50) 33,271.88 14,465,540 0.7051% 7.05 10.58 14.10 17,63 24.68 35.26 65.22
2027 105,000.00 4.75% 10,565.00 115,565.00 103,000.00 (12,565.00) 20,706.88 14,827,178 0.6947 6.95 10,42 13.89 17.37 24.31 34.73 64.26
2028 115 4,65% 5.57730 120.577.50 104,000.00 QkS77,50) 4,129.38 15, 19pS8 0.6843% 6,64 10.26 17,11 23.95 34.22 63.30
1,200,000.00 635,683.75 1,835,683.75 34,613.13 $1,BDS, 000.00 54,129.38 . 318:y7.; 90-: ..:.;537:1J: , : 56$: . ¢.,;
•
U : 51. u 5 #ss::...: 52,17
APPLICATION OF FUNDS
ESTIMATED CONSTRUCTION NEEDS 51,137,400.00 BONDS DATED; JUNE 1% 2009 2008 ISSUE 2 009 ISSUE
TOTAL HARD COSTS 1,137,400,00 ESTIMATED AAVERAGE COUPON RATE: 4,070.0 ZSft% II
ADD SOFT COSTS OF ISSUANCE BONDS MATURE: DECEMBER 15, 2010•THROUGH 2028 119TIMATED NET EFFECT RA T& y � w 4,1760 %( __jJ697 %!
DISCOUNT FACTOR (1.375% OF PAR) 16,500,00
CAPITALIZED INTEREST (9 MONTHS) 34,813.13 INTEREST REST; DECEMBER 15, 2OD9 AND SEMIANNUALLY THEREAFTER BOND YEARS 85,370.00 14,925.00
EST. REGISTRATION (START UP AND 1ST YR) 750.00 ON EACH JUNE 15 AND DECEMBER 15.
ESTIMATED RATING FEE 6,000.00
ESTIMATED FAIRNESS OPINION 0.00 OPTION: ALL BONDS MATURING IN THU YEARS 2017 THROUGH
ESTIMATED OFFICIAL ST ATEMENT PRINTING MAD 2028 ARE CALLABLE AT THE OPTION OF THE CITY ON NORTH LAND .-S E C. U R X T X E S
ESTIMATED LEGAL SERVICES 5.000.00 DEMMER 15, 2016 OR ANY DATE THEREAFTER
SUBTOTAL SIAK713.13 PAR PLUS ACCRUED INTEREST.
LESS; INVESTMENT INCOME ON CONSTR. ACCOUNT (Sn4.94) (A) PURCHASE PRICE: $1,183,500.00 NORTHLAND SECURITIES, INC.
GRANDTOTAL $1,199,988.19 PAYING AGENT& STEVEN J.MATTSON, EXECUTIVE VICE PRESIDENT
ROUNDED FOR ISSUANCE $1,200 000.00 REGISTRAR: NORTHLAND TRUST SERVICES 61245115919
(A) ASSUMES NET CONSTRUCTION AND INTEREST FUNDS INVESTED EST. BOND SALE DATE: MAY 2009 J 800. 851 -2920
FOR AVERAGE OF 90 DAYS 8 0.25% EST BOND CLOSING DATI JUNE 2009
Interest Rate Analysis - Bonding or Paying from City Funds
Net costs over 20 years if we bond $1,200,000
Lost F$1,200,000 No Bonding
Bond Bond Principal Interest Bond Tax Interest on less tax levy Interest on
Principal Payments Rate Interest Levy Bonds over 20 years $1,200,000 /yr
2009 1,200,000.00 0.00 1.90% 23,20835 22,800.00 22,800.00
2010 1,165,000.00 35,000.00 1.80% 46,417.50 86,000.00 20,052.00 22,010.40
2011 1,130,000.00 35,000.00 2.00% 45,787.50 87,000.00 20,540.00 24,896.21
2012 1,090,000.00 40,000.00 2.15% 45,087.50 88,000.00 20,188.50 26,546.19
2013 1,050,000.00 40,000.00 2.35% 44,227.50 89,000.00 19,975.00 30,461.94
2014 1,005,000.00 45,000.00 2.60% 43,287.50 90,000.00 19,760.00 34,494.58
2015 960,000.00 45,000.00 2.80% 42,117.50 91,000.00 18,732.00 38,113.86
2016 910,000.00 50,000.00 3.00% 40,857.50 92,000.00 17,310.00 41,979.70
2017 860,000.00 50,000.00 3.25% 39,357.50 93,000.00 15,730.00 46,842.34
2018 805,000.00 55,000.00 3.50% 37,732.50 94,000.00 13,650.00 52,085.08
2019 750,000.00 55,000.00 3.75% 35,807.50 95,000.00 11,062.50 57,758.64
2020 690,000.00 60,000.00 4.00% 33,745.00 96,000.00 7,960.00 63,919.56
2021 625,000.00 65,000.00 4.15% 31,345.00 97,000.00 4,233.00 68,969.20
2022 555,000.00 70,000.00 4.25% 28,647.50 98,000.00 170.00 73,562.30
2023 480,000.00 75,000.00 4.35% 25,672.50 99,000.00 0.00 E- starting 2023 78,493.14
2024 400,000.00 80,000.00 4.45% 22,410.00 100,000.00 0.00 the $1,200,000 83,790.53
2025 315,000.00 85,000.00 4.55% 18,850.00 101,000.00 0.00 will be paid 89,485.93
2026 220,000.00 95,000.00 4.65% 14,982.50 102,000.00 0.00 back. The lost 95,613.75
2027 115,000.00 105,000.00 4.75% 10,565.00 103,000.00 0.00 interest will be 102,211.61
2028 0.00 115,000.00 4.85% 5,577.50 104,000.00 0.00 zero. 109,320.70
1,200,000.00 635,683.75 1,805,000.00 189,363.00 1,163,355.65
Interest on 1,200,000 Bond Issue for life of bonds (Northland 635,683.75 4% Yield
Plus Interest Lost on Bond Proceeds over 20 years 189,363.00 over 20 yrs 960,000.00
Net loss of interest over 20 years if bonding is used 825,046.75
Bonding Costs 63,313.13
Total Costs if Bonding is Used 888,359.88
Loss of interest on $1,200,000.00 over 20 year period (4% yield 20 yrs) 960,000.00