IV.8. Authorize the Prepayment and Redemption of the City’s Taxable General Obligation Refunding Bonds, Series 2009B; BishopJanuary 2, 2018 Council Report 2019-006
AUTHORIZE THE PREPAYMENT AND REDEMPTION
OF THE CITY’S TAXABLE GENERAL OBLIGATION
REFUNDING BONDS, SERIES 2009B
Proposed Action
Staff recommends approval of the following motion: Adopt Resolution No. 2019-003 ratifying the Call
for the Prepayment and Redemption of the City’s Taxable General Obligation Housing Improvement
Refunding Bonds, Series 2009B.
Adoption of this motion will result in the bonds being called in full on February 1, 2019.
Overview
The City of Hopkins issued Taxable General Obligation Housing Improvement bonds, Series 1999A and
1999A for improvements to the Westbrooke Patio Homes condominiums and Valley View Housing
projects. These bonds were refunded in 2009 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 $890,000 plus $20,495 in interest
and will save a total of $43,330 in future interest expense.
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 and Valley View Housing projects will inherit a greater amount of
funds at the end of the debt service payments, allowing for future improvements. Any funds returned to the
association will need to be spent for improvements pursuant to the original development agreement. The
funds are only remitted upon receiving a report detailing the projects and substantiating the expenses that
were made pursuant to the development agreement.
Staff Recommendation
Finance recommends adopting the resolution redeeming the callable bond described in the resolution.
Supporting Information
• Resolution No. 2019-003
___________________________
Nick Bishop, CPA
Finance Director
Financial Impact: $ 43,330 savings overall Budgeted: Y N X Source: Spec Assmnts
Related Documents (CIP, ERP, etc.): _____ ______Notes: _____ _______________
CITY OF HOPKINS, MINNESOTA
RESOLUTION NO. 2019-003
RESOLUTION RATIFYING THE CALL FOR THE PREPAYMENT
AND REDEMPTION OF THE CITY’S TAXABLE GENERAL
OBLIGATION HOUSING IMPROVEMENT REFUNDING BONDS,
SERIES 2009B
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 Housing
Improvement Refunding Bonds, Series 2009B (the “Bonds”), dated December 15, 2009, in the original
aggregate principal amount of $2,865,000, of which $890,000 in principal amount is currently
outstanding. The Bonds maturing on and after February 1, 2019 are subject to redemption on or after
February 1, 2018 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 Bond Trust Services Corporation, Roseville, Minnesota, 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, 2020 and thereafter, comprising all of the Bonds subject to
redemption, be prepaid and redeemed on February 1, 2019 (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 $890,000.
3. On December 30, 2018, the Registrar mailed 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. The actions of the Registrar in calling the
Bonds for redemption are hereby ratified.
Adopted by the City Council of the City of Hopkins, Minnesota this 2nd day of January, 2019.
________________________________________
Molly Cummings, Mayor
ATTEST:
Amy Domeier, City Clerk