Loading...
HomeMy WebLinkAboutResolution No. 2011-125 CITY OF COLUMBIA HEIGHTS, MINNESOTA RESOLUTION NO. 2011-125 APPROVING THE TERMS OF INTERNAL LOAN IN CONNECTION WITH REDEMPTION OF THE CITY'S GENERAL OBLIGATION IMPROVEMENT AND SEWER AND WATER REVENUE BONDS, SERIES 2003A BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA ( "CITY ") AS FOLLOWS: Section 1. Background. 1.01. By separate action, the City has determined to prepay the City's $2,600,000 General Obligation Sewer and Water Revenue Bonds, Series 2003A (the "Series 2003A Bonds "), on December 1, 2011 (the "Redemption Date "). 1.02. The outstanding principal amount of the Series 2003A Bonds is $1,220,000, of which $660,000 represents the Improvement Bonds portion of the Series 2003A Bonds, and $560,000 represents the Sewer and Water Revenue Bonds portion of the Series 2003A Bonds (as those terms are defined in Resolution No. 2003 -21 awarding sale of the Series 2003A Bonds). 1.03. The City has determined to temporarily finance a portion of the amount need to redeem the respective portions of the Series 2003A Bonds from available funds in the Capital Equipment Replacement Fund 431 ( "Fund 431"), which fund is administered by the City and has a balance that is legally available for such purposes. 1.04. The City intends to reimburse Fund 431 for the costs of such bond redemption from water and storm sewer revenues in accordance with the terms of this resolution (which terms are referred to collectively as the "Internal Loan "). Section 2. Terms of Internal Loan. 2.01. On the Redemption Date, the City shall advance money from Fund 431 to pay the following portions of the cost to redeem the Improvement Bonds and Sewer and Water Revenue Bonds, respectively: Improvement Bonds: $ 17,000 Water and Sewer Revenue Bonds: $482,000 Total Internal Loan $499,000 393316v1 SJB CL162 -46 2.02. The Internal Loan shall be repaid from the following sources and in accordance with the following terms: Improvement Bonds: $17,000, from net revenues of the City's water fund. Water and Sewer Revenue Bonds: $381,000 from net revenues of the City's water fund. $101,000 from net revenues of the City's storm sewer fund Therefore, the total principal amount of the Internal Loan repaid with net water revenues is $398,000, and the total principal amount repaid with net storm sewer revenues is $101,000. For each component, the City shall repay Fund 431 the principal amount advanced together with interest thereon accruing from the Redemption Date at the annual rate of 3.5 %, all payable from the net revenues as described above (which payment is subordinate to any other internal loans or obligations secured in whole or in part with such revenues). 2.03. Principal and interest ( "Payments ") shall be paid annually on each December 31, commencing December 31, 2012 ( "Payment Dates ") and continuing through the date the principal and accrued interest on each component of the Internal Loan is paid in full. The proposed payment schedule is attached hereto as Exhibit A. 2.04. The principal sum and all accrued interest payable under this Internal Loan are pre- payable in whole or in part at any time by the City without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the City and shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Internal Loan or other costs, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Internal Loan or other costs incident hereto. The City shall have no obligation to pay any principal amount of the Internal Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The City may amend the terms of this Internal Loan at any time by resolution of the City Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Section 3. Effective Date. This resolution is effective upon the date of its approval. 393316v1 SJB CL162 -46 2 Approved by the City Council of the City of Columbia Heights this 24 day of October, 2011. Offered by: Diehm Second by: Schmitt Roll call: Ayes: Peterson, Nawrocki, Diehm, Schmitt Absent: Williams 7,) Mayor Gary L. Pet son Attest: (Patricia Muscovitz AMC City Clerk 393316v1 SJB CL162 -46 3 EXHIBIT A CITY OF COLUMBIA HEIGHTS Proposed Interfund loan from Capital Equip Replacement Fund 431 Water Water Water Stormsewer Stormsewer Stormsewer loan balance Prin Int @ 3.5% loan balance Prin Int @ 3.5% 12/1/2011 398,000 - - 101,000 - - 12/31/2012 323,000 75,000 15,090 82,000 19,000 3,830 12/31/2013 259,000 64,000 11,310 66,000 16,000 2,870 12/31/2014 195,000 64,000 9,070 50,000 16,000 2,310 12/31 /2015 131,000 64,000 6,830 34,000 16,000 1,750 12/31/2016 66,000 65,000 4,590 17,000 17,000 1,190 12/31/2017 - 66,000 2,310 - 17,000 600 - 398,000 49,200 - 101,000 12,550 393316v1 SJB CL162 -46 A -1