CR 2014-040 Resolution calling a Public Hearing Relating to the Adoption of Street Reconstruction Plan and the Issuance of Street Reconstruction Bonds ThereunderApril 1, 2014 Council Report 2014-040
City of Hopkins
RESOLUTION CALLING A PUBLIC HEARING RELATING TO THE ADOPTION OF A
STREET RECONSTRUCTION PLAN AND THE ISSUANCE OF STREET
RECONSTRUCTION BONDS THEREUNDER
Proposed Action
Mrove Resolution 2014-021 calling a public hearingrelating to the adoption of a street reconstruction
plan and the issuance of street reconstruction bonds thereunder.
With this motion a notice will be placed in the official newspaper announcing the details of the public hearing and
the proposal to adopt a street reconstruction plan.
Overview
The City annually issues 429 GO assessment bonds to complete planned street reconstruction projects. Under the
429 process the City must assess a minimum of 20% of project costs to benefitting property owners which most
years is not an issue. For the 2014 street project we do not have the minimum 20% so we are proposing that the
City utilize its authority to issue GO street reconstruction bonds which will be re -paid by a general tax levy.
In order to utilize this type of financing, the City has to prepare a 5 -Year Street Reconstruction Plan (SRP) which is
presented at a public hearing to solicit comment and feedback from the community (this isn't required for 429
improvement bonds and is an extra step in the typical bonding process). Upon conclusion of the public hearing, the
Council must approve the SRP via a unanimous vote of the members present.
In addition these bonds are restricted by the amount of net debt the City can issue. The City cannot issue debt in
excess of 3% of the assessor's market value and the City is well under that limit having over 78% of debt levying
capacity available.
The timeline for this bond project is outlined in the attached memo from Ehlers and the resolution with the public
hearing notice is also attached. The public hearing is set for May 61h
Primary Issues to Consider
• Funding for 2014 street projects
Supporting Information
• Memo from Stacie Kvilvang & Jason Aarsvold, Ehlers
• Resolution No. 2014-021 along with hearing notice
Christine M. Harkess, CPA, CGFM
Finance Director
Financial Impact: $ Budgeted: Y/N N Source: Bond Proceeds
Related Documents (CIP, ERP, etc.): CIP Notes:
F
Memo
To: Christine Harkess — Finance Director
From: Stacie Kvilvang & Jason Aarsvold
Date: April 1, 2014
Subject: 2014 and 2015 Road Reconstruction Bonds
Annually the City issues 429 General Obligation assessment bonds to complete the
planned road reconstruction projects. Under the 429 process the City must assess a
minimum of 20% of the project costs to benefitting property owners, which typically is
not an issue. For the 2014 and 2015 road reconstruction improvements, the City is
unable to meet the minimum assessment threshold and therefore will need to finance
the project through the Street Reconstruction Bond process instead.
The City is unable to meet the 20% threshold since many of the improvement are
outside of the assessable area. However, the City will be assessing approximately
$160,000 to benefiting property owners at a rate of 2% above True Interest Costs (TIC)
of the bonds.
We are proposing that the City utilize its authority to issue General Obligation Street
Reconstruction Bonds to finance the project. Similar to the 429 Bonds, the portion of
the project not being paid by assessments will be paid by a general tax levy. This
authority was granted to Cities in 2002 and it generally exempts city bonds issued under
a street reconstruction program from the referendum requirements usually required for
bonding expenditures (referendum generally required if 20% of the project is not/cannot
be assessed). The City is required to hold a public hearing on its intent to issue these
bonds and its 5 -year Street Reconstruction Plan.
In order to utilize this type of financing, the City has to prepare a 5 -Year Street
Reconstruction Plan (SRP) which is presented at a public hearing to solicit comment
and feedback from the community (this isn't required for 429 improvement bonds and is
an extra step in the typical bonding process). Upon conclusion of the public hearing,
the Council must approve the SRP via a unanimous vote of the members present.
Although a referendum is not required, a reverse referendum is allowable. If a petition
bearing the signatures of at least 5 percent of the votes cast in the last general election
requesting a vote on the issuance of the bonds is received by the municipal clerk within
30 days after the public hearing, a referendum vote on the issuance of the bonds shall
be called (if a vote is taken and the referendum passes, the taxes would be levied on
market value rather than tax capacity).
EHLERS
LEADERS IN PUBLIC FINANCE
Minnesota phone 651-697-8500
Offices also in Wisconsin and Illinois fax 651-697-8555
toll free 800-552-1171
www,ehlers-inc.com
3060 Centre Pointe Drive
Roseville, MN 55113-1122
Christine Harkess — Finance Director
2014 and 2015 Road Reconstruction Bonds
April 1, 2014
Page 2
In addition, these bonds are restricted by the amount of net debt the City can issue.
The City cannot issue debt in excess of 3% of the assessor's taxable market value for
the city. For Hopkins, the 2014 estimated TMV is $1,410,423,043. Therefore, the total
amount of outstanding debt cannot exceed $42,312,691. As of December 31, 2013 the
City had only $9,610,000 subject to the legal debt limit (nearly $33 million in capacity
available).
Following is the timeline for issuance of the bonds:
City Council Calls For Public Hearing on Issuance of Bonds
April 1, 2014
Send Public Hearing Notice to Newspaper
April 3, 2014
Date of Publication of Public Hearing Notice
April 11, 2014
Public Hearing on Street Reconstruction Plan
May 6, 2014
30 -Day Reverse Referendum Period Ends
June 6, 2014
Distribute Official Statement:
Week of May 26, 2014
Conference with Rating Agency:
Week of June 2, 2014
City Council Meeting to Award Sale of the Bonds:
June 10, 2014
Estimated Closing Date:
July 1, 2014
Please contact me at 651-697-8506 with any questions.
CITY OF HOPKINS, MINNESOTA
RESOLUTION NO. 2014-021
RESOLUTION CALLING A PUBLIC HEARING RELATING TO THE
ADOPTION OF A STREET RECONSTRUCTION PLAN AND THE ISSUANCE
OF STREET RECONSTRUCTION BONDS THEREUNDER
Section 1. Background.
1.01. The City of Hopkins, Minnesota (the "City"), is authorized under Minnesota Statutes,
Section 475.58, subdivision 3b (the "Act"), to prepare a plan for reconstruction of streets in the City over
the next five years, including a description of the affected streets and estimated costs (the "Plan"), and to
issue general obligation bonds to finance the cost of street reconstruction activities described in the Plan.
1.02. Under the Act, the City is required to hold, a public hearing regarding the Plan and
issuance of the bonds.
1.03. The City Council has determined to prepare a Plan for the City and to issue general
obligation bonds in a principal amount not to exceed $8,000,000 (the "Bonds") to finance certain street
reconstruction activities in the City.
Section 2. Plan Authorized, Hearing Scheduled.
2.01. The City hereby authorizes its staff and consultants to prepare a Plan for reconstruction of
City streets, or any portion thereof designated by the City Manager, and to place a copy of the Plan on file
with the City Manager by no later than the date of publication of the hearing notice.
2.02. The City Council will hold a public hearing regarding the Plan and issuance of the Bonds
on Tuesday, May 6, 2014, at 7:00 P.M. at City Hall. The City Clerk is authorized and directed to publish
a notice substantially in the form attached hereto as EXHIBIT A in the official newspaper of the City at
least 10 days but no more than 28 days prior to the date of the hearing.
2.03. City staff and consultants are authorized to take all other actions needed to bring the Plan
and issuance of the Bonds before the City Council.
Approved by the City Council of the City of Hopkins, Minnesota this 1" day of April, 2014.
Eugene J. Maxwell, Mayor
ATTEST:
Kristine A. Luedke, City Clerk
EXHIBIT A
FORM OF NOTICE OF PUBLIC HEARING
NOTICE OF PUBLIC HEARING
CITY OF HOPKINS
COUNTY OF HENNEPIN
STATE OF MINNESOTA
NOTICE IS HEREBY GIVEN that the City Council of the City of Hopkins, Hennepin County, State
of Minnesota (the "City"), will hold a public hearing on Tuesday, May 6, 2014, at or after 7:00 P.M. in the
City Council Chambers at City Hall, 1010 First Street South in the City, relating to a proposal concerning:
(1) the adoption of a five-year street reconstruction plan (the "Plan"); and (2) the issuance of general
obligation street reconstruction bonds (the "Bonds") to finance the reconstruction of certain streets in the
City, all pursuant to Minnesota Statutes, Section 475.58, subdivision 3b. The Bonds will be issued in a
principal amount not to exceed $8,000,000. A draft copy of the Plan is on file with the City Clerk and is
available for public inspection at City Hall during regular business hours.
If a petition requesting a vote on the issuance of the Bonds, signed by voters equal to five percent
of the votes cast in the last City general election, is filed with the City Clerk within 30 days after the
public hearing, the City may issue the Bonds only after obtaining approval of a majority of voters voting
on the question at an election.
At the time and place fixed for the public hearing, the City Council will give all persons who
appear at the hearing an opportunity to express their views with respect to the proposal. In addition,
interested persons may direct any questions or file written comments respecting the proposal with the City
Clerk, at or prior to said public hearing.
Dated: [Date of Publication]
A-1
BY ORDER OF THE CITY COUNCIL OF THE
CITY OF HOPKINS, MINNESOTA
/s/ Kristine A. Luedke
City Clerk