CR 2003-048 Authorize sale of Bonds fot the housing and Redevelopment Authority Public Facility Lease Revenue Bonds
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March 14,2003
HOPKINS
Council Report 03-048
AUTHORIZE SALE OF BONDS FOR THE HOUSING AND REDEVELOPMENT AUTHORITY
PUBLIC FACILITY LEASE REVENUE BONDS,
Proposed Action
Staff recommends approval of the following motion:
· Adopt Resolution No. 03-029 authorizing the sale of Housing and Redevelopment Authority
Public Facility Lease Revenue Bonds for the police remodel facility proiect.
Adoption of this motion will result in the bonds being offered for sale at a furture date determined by the
council.
Overview
HRA Public Facility Lease Revenue Bonds: The HRA will issue Public Facility Lease Revenue Bonds in
the amount of $3,500,000. The proceeds of which will be used to remodel the existing fire and police
stations to accommodate the police department. The bond is structured to mature within 20 years.
Currently the City of Hopkins has a contract with Kraus Anderson and Collaborative Design Group for the
construction management and architectural services for the police remodeling project. Designs are being
finalized with estimated construction to begin in the fall of 2003.
The city intends on issuing debt just prior to the beginning of construction and reimbursing itself for the
architectural and construction management fees already incurred for this project.
Primary Issues to Consider
. The purpose of the bond issues
. Impacts of the bond issues
. Details of the bond issue
Supportine: Information
· Resolution No. 03-029
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Lori Yager I
Finance Director
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Primary Issues to Consider
The purpose of the bond issues
HRA Public Facility Lease Revenue Bonds: A space needs analysis was conducted in 2000. At that time
it was determined that the police, fire and public works facilities were all inadequate for their respective
needs. To create adequate facilities, the current fire station is to be remodeled to accommodate the police, a
new fire station will be constructed and a new storage facility will be built for public works.
One goal of the council was to minimize the tax impact to residents for such a large facility project. This is
partially accomplished through the issuance of lease revenue bonds in replace of a referendum bond issue.
Another goal of the city council was to utilize existing property owned by the city. The city has
accomplished this goal by using the existing public works site. With some modifications and improvements
to the current public works site, the city will construct a new fire station and a new public works storage
facility on the existing site. Remodeling of the current fire station to accommodate the police department
will occur in 2003/2004. An HRA lease revenue bond will also be issued at that time for the police station
remodeling project.
The City CouncillHRA intend on remodeling the current fire and police stations to accommodate the changes
in the police department. The project is within the HRA's redevelopment project area no. 1. The proceeds of
the bonds will be used to remodel the existing police and fire stations and add an addition between the
existing city hall and fire station.
The City CouncillHRA has held the necessary public hearings and has authorized the creation of the
modification of redevelopment project area No.1 and will establish the lease agreement with the city.
The Impacts of the bond issues
HRA Public Facility Lease Revenue Bonds: The HRA will issue Public Facility Lease Revenue Bonds
in the amount of $3,500,000. The city will sign a lease agreement to pay an amount equivalent to the
annual principal and interest for the bonds issued for the facility project. The city obtains the lease
amount through an annual tax levy. The projected annual tax levy for the police remodel facility is
approximately $290,000. The impact to an average homeowner is approximately $40 a year. The annual
debt service principal and interest will be approximately $285,000. The bond is structured to mature
within 20 years.
Details of the Bond Issue
Staff and our financial consultants, Ehlers and Associates, recommend that we ask for a rating from both
Standard and Poor's and Moody's for both issues. The cost of the ratings will be paid for with bond
revenues.
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CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 03-029
RESOLUTION PROVIDING FOR THE SALE OF
$3,500,000 HRA PUBLIC FACILITY LEASE REVENUE BONDS
WHEREAS, the City Council of the City of Hopkins, Minnesota has determined that it is necessary and
desirable to issue $3,500,000 ofHRA Public Facility Lease Revenue Bonds, (Police and Fire Station
Facility Remodel), (the "Bonds"), to finance the remodeling ofthe current fire and police stations in
the City; and
WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers") as its
independent financial advisor and is therefore authorized to solicit proposals in accordance with
Minnesota Statutes, Section 475.60, Suddivision 2(9);
NOW, THEREFORE, BE IT RESOLVED by the City Council of Hopkins, Minnesota, as follows:
1. Authorization: Findings. The City Council hereby authorizes Ehlers to solicit proposals at a
future date for the sale of the Bonds.
2.
Meeting: Proposal Opening. The City Council shall meet in the future, to be detennined at a
later date, for the purpose of considering sealed proposals for, and awarding the sale of the
Bonds. The City Clerk, or designee, shall open proposals at the time and place specified in such
Terms of Proposal.
3. Official Statement. In connection with said sale, the officers or employees of the City are hereby
authorized to cooperate with Ehlers and participate in the preparation of an official statement for
the Bonds and to execute and deliver it on behalf of the City upon its completion.
Adopted by the City Council of the City of Hopkins held this 18th day of March, 2003.
Eugene Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk