CR 99-113 Authorize Call of Serial Bonds in TIF District 1-1
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0/ June 10, 1999 o p I( \ ~ Council Report 99-113
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AUTHORIZE CALL OF SERIAL BONDS IN TIfF DISTRICT 1-1
Proposed Action
Staff recommends approval of the following motion: Adopt Resolution No. 99-051 authorizing the call
of Taxable General Obligation Redevelopment Refunding Bonds in Tax Increment District 1-1.
Adoption ofthis motion will result in the bonds being called on August 1, 1999.
Overview
The City of Hopkins issued Taxable General Obligation Redevelopment Refunding bonds in 1992. Two of
the serial bonds issued are now callable. The cost of calling the bonds is $310,000. Tax Increment District
1-1 has the capacity to call these bonds this year and continue operating in a positive cash environment. The
savings of interest on these bonds is $18,562. The lost earning potential of using the funds to call the bonds
is approximately $12,375. This is a net savings of approximately $6,187.
Primary Issues to Consider
The financing of the serial bonds, issued in 1992 from TIF 1-1, was done with the intention of calling bonds
0 if enough tax increment revenues are generated in the appropriate amount of time. The district has the
working capital available to call the bonds and to maintain a healthy balance for projects and future debt
service payments. The bonds that are callable have an interest rate of7.5% and mature on February 1,2000
and August 1,2000. By calling the bonds early we are saving the difference between what finance can earn
on the principal amount of the bonds and what the interest charge is on the bonds. Currently, investments are
earning about 5% interest. As stated previously, the approximate savings' is $6,187.
Staff Recommendatnon
Finance recommends adopting the resolution calling the bonds described therein.
Supportin$! Information
0 Resolution No. 99-051
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Lori Yager I ~
Finance Director
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crrv OF HOPKINS
('~ HENNEPIN COUNTY, MINNESOTA
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RESOLUTION 99-051
RESOLUTION PROVIDING FOR THE CALL OF
$310,000 TA'UBLE GENERAL OBLIGATION REDEVELOPMENT REFUNDING
BONDS, SERlIJES 1992
WHEREAS, the City Council of the City of Hopkins, Minnesota has determined that it is desirable
to call the City's $310,000 Taxable General Obligation Redevelopment Refunding Bonds, Series
1992; and
WHEREAS, the City has identified the bonds as CUSIP #439866KA(l) and CUSJP
#439866KB(9) dated issue of February 1, 1992;
NOW, THEREFORE, BE IT RESOLVED by the City Council of Hopkins, Minnesota, as follows:
1. Authorization; The City Council hereby authorizes Bankers Trust to call in full the
Taxable General Obligation Redevelopment Refunding Bonds, Series 1992, dated
February 1, 1992, as described above.
('--J 2. Terms of the Bonds. The terms and conditions of the Bonds allow for the call of serial
bonds described above.
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3. Intent. It is the intent of the City of Hopkins to call such bonds as it deems appropriate
and desirable.
Adopted by the City Council of the City of Hopkins held this 15th day of June, 1999.
Charles D. Redepenning, Mayor
ATTEST:
Terry Obermaier, City Clerk
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