IV.8. Authorize the Prepayment and Redemption of the City’s Taxable General Obligation Refunding Bonds, Series 2005B; Harkess (CR2015-151)
December 1, 2015 Council Report 2015-151
AUTHORIZE THE PREPAYMENT AND REDEMPTION
OF THE CITY’S TAXABLE GENERAL OBLIGATION
REFUNDING BONDS, SERIES 2005B
Proposed Action
Staff recommends approval of the following motion: Adopt Resolution No. 2015-096 providing for the
prepayment and redemption of the City’s callable Taxable General Obligation Refunding Bonds, Series
2005B.
Adoption of this motion will result in the bonds being called in full on February 1, 2016.
Overview
The City of Hopkins issued Taxable General Obligation Housing Improvement bonds, Series 1997B in
1997 for improvements to the Westbrooke Patio Homes condominiums. These bonds were refunded in
2005 at a significant interest savings. The Housing Improvement Fees (special assessments) continued to
be paid by the homeowners based on the original bonds. In reviewing the debt service requirements
remaining there are adequate funds on hand to call the bonds and pay the remaining debt service. Cost of
calling the bonds is $415,000 plus $10,553.75 in interest and will save the association $22,075 in future
interest expense. In addition following the bond call there will be over $420,000 that the City will be able
to return to the association for future repairs.
Primary Issues to Consider
The finance plan for the housing improvement project includes paying the association any excess fees
collected after payment of principal, interest and related costs of the bonds. By calling this bond early, the
Westbrooke Patio Homes Association will inherit a greater amount of funds at the end of the debt service
payments, allowing for future improvements to the Westbrooke Patio Homes Condominiums. Any funds
returned to the association will need to be spent for improvements pursuant to the original development
agreement. The funds will be remitted to Westbrook Patio Homes Association upon receiving a report
detailing the projects and substantiating the expenses that were made pursuant to the development agreement.
taff Recommendation
S
Finance recommends adopting the resolution redeeming the callable bond described in the resolution.
Supporting Information
Resolution No. 2015-096
___________________________
Christine M Harkess, CPA, CGFM
Finance Director
Financial Impact: $ 22,075 savings overall Budgeted: Y X N Source: Spec Assmnts
Related Documents (CIP, ERP, etc.): _____ ______Notes: _____ _______________
CITY OF HOPKINS, MINNESOTA
RESOLUTION NO. 2015-096
RESOLUTION PROVIDING FOR THE PREPAYMENT AND
REDEMPTION OF THE CITY’S TAXABLE GENERAL
OBLIGATION REFUNDING BONDS, SERIES 2005B
BE IT RESOLVED By the City Council of the City of Hopkins, Minnesota (the “City”), as
follows:
1. The City has previously issued and sold its Taxable General Obligation Refunding
Bonds, Series 2005B (the “Bonds”), dated November 3, 2005, in the original aggregate principal amount
of $1,755,000, of which $415,000 in principal amount is currently outstanding. The Bonds are subject to
redemption on or after February 1, 2015 at a price of par plus accrued interest. Redemption may be in
whole or in part, and if in part, at the option of the City and in such order as the City will determine and
within a maturity selected by Bankers Trust Company, Des Moines, Iowa, acting as the registrar for the
Bonds (the “Registrar”). Prepayments will be at a price of par plus accrued interest.
2. It is determined that it is in the best interests of the sound financial management of the
City that Bonds maturing on February 1, 2016 and thereafter, comprising all of the Bonds subject to
redemption, be prepaid and redeemed on January 5, 2016 (or on the first date thereafter for which the
Registrar of the Bonds can provide proper notice to the holders of the Bonds), and those Bonds are hereby
called for redemption on that date in the aggregate principal amount of $415,000.
3. The Registrar is authorized and directed to mail notice of call for redemption of the
Bonds in the form attached hereto as EXHIBIT A to the registered owners of the Bonds to be redeemed at
the address shown on the registration books kept by the Registrar.
st
Adopted by the City Council of the City of Hopkins, Minnesota this 1 day of December, 2015.
________________________________________
Eugene J. Maxwell, Mayor
ATTEST:
Amy Domeier, City Clerk
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EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$1,755,000
CITY OF HOPKINS, MINNESOTA
TAXABLE GENERAL OBLIGATION REFUNDING BONDS
SERIES 2005B
NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Hopkins,
Minnesota (the “City”), there have been called for redemption and prepayment on
______________, 20___
all outstanding bonds of the City designated as the Taxable General Obligation Refunding Bonds, Series
2005B, dated November 3, 2005, having a stated maturity date of February 1 in the years 2016 through
2018, both inclusive, totaling $415,000 in principal amount, and with the following CUSIP numbers:
Year of Maturity Amount CUSIP
2016 $130,000 439866 YC2
2017 140,000 439866 YD0
2018 145,000 439866 YE8
The bonds are being called at a price of par plus accrued interest to __________, 20___, on which
date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are
requested to present their bonds for payment at the main office of Bankers Trust Company, 453 Seventh
Street, Des Moines, Iowa, on or before ____________, 20___.
Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003,
federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time
the payment by the redeeming institutions if they are not provided with your social security number or federal
employer identification number, properly certified. This requirement is fulfilled by submitting a W-9 Form,
which may be obtained at a bank or other financial institution.
Dated: _____________, 20___.
BY ORDER OF THE CITY COUNCIL OF THE CITY
OF HOPKINS, MINNESOTA
By /s/ Mike Mornson
City Manager
City of Hopkins, Minnesota
A-1
471786v1 JAE HP110-70
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN ) SS.
)
CITY OF HOPKINS )
I, the undersigned, being the duly qualified and acting City Clerk of the City of Hopkins, Minnesota
(the “City”), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of
a regular meeting of the City Council held on Tuesday, December 1, 2015, with the original thereof on file in
my office and the same is a full, true and complete transcript therefrom insofar as the same relates to the
prepayment and redemption of the City’s Taxable General Obligation Refunding Bonds, Series 2005B,
issued in the original aggregate principal amount of $1,755,000.
WITNESS My hand as City Clerk and the corporate seal of the City this ____ day of
December, 2015.
City Clerk
City of Hopkins, Minnesota
(SEAL)
471786v1 JAE HP110-70