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CR 09-089 Authorize Sale of $3,340,000 G.O. Bonds, Series 2009BOctober 16, 2009 City of KopkiM City Council Report 2009 -089 AUTHORIZE SALE OF $3,340,000 G.O. BONDS, SERIES 2009B Proposed Action Staff recommends approval of the following motion: Adopt Resolution 2009 -057 Resolution Providing for the Sale of $3.340,000 General Obligation Bonds, Series 2009B. Adoption of this motion will result in the bonds being offered for sale on November 17, 2009. Overview In the past several years significant utility improvements have been done in conjunction with street improvemetns projects and while we have issued improvement bonds for the street portion we have used existing funds to pay for the utility portion of the projects. To ensure adequate funds are on hand for future utility infrastructure improvements we need to replenish the utility funds. Due to low interest rates as a result of current market conditions this is an excellent opportunity to sell bonds. In addition to bonding for new money we are recommending the refinancing of the 1999C Storm Sewer Bonds and the 2000A which we anticipate will save us an estimated $107,548 in interest. Primary Issues The bond proceeds will be used to finance water and sewer improvements that were done in conjunction with teh 2007, 2008 and 2009 street improvements. Revenues from water, sewer and storm sewer funds will be utilitzed to re -pay the bonds. Staff Recommendation Staff recommends approval of this resolution and further recommends, along with the City's financial advisor, that we ask for a rating from Standard & Poors for the issue. The cost of the rating will be paid with bond proceeds. Supyortin2 Information • Resolution No. 2009 -057 • Bond Sale Report • Cash Flow Projections Christine M. Harkess, CPA, CGFM Finance Director Financial Impact: $ 3,340,000 in bond proceeds; est $107,548 savings in refunding_ Budgeted: Y/N No Source: Water Sewer and Storm Sewer Funds Related Documents (CIP, ERP, etc.): Capital Improvement Plan Notes: Debt Issuance Services Pre-Sale Report for (;,3,340,000 G. • Bonds, Series 200•R, Includes: Refunding • G.O. Storm Sewer Revenue Bonds, Series 1•9• C Refunding of G.O. Water Revenue Bonds, Series 2000A G.O. Water Revenue Bonds (New Funds) G.O. Sewer Revenue Bonds (New Funds) City of Hopkins, Minnesota vmw,ehlers-inacom . . .. ..... .. EHLERS Minnesota phone 651-697-8500 3060 Centre Pointe Drive LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, IVIN 55113-1122 Debt Issuance Services Details of Proposed Debt Proposed Issue: $3,340,000 General Obligation Bonds, Series 2009B Purpose: For the Series 2009B Bonds, we recommend the City combine two refundings of existing bond issues with two new bond issues in order to increase the par amount to make it more attractive in the market which in turn will reduce interest rates. In addition, combining the issues will reduce issuance costs. The 2009B Bonds consist of the following purposes: 1) To finance the current refunding of all of the City's callable General Obligation Storm Sewer Revenue Bonds, Series 1999C, dated August 1, 1999 (the "Prior 1999C Bonds "). The Prior 1999C Bonds were issued in the amount of $1,545,000 and are callable in the amount of $610,000. The savings will begin with a lower interest payment on August. 1, 2010. Current interest rates are 5.0 %. Based on interest rates of 1.05% to 2.50 %, the estimated savings as a result of the refunding is approximately $40,343 after all fees and expenses. 2) To finance the current refunding of all of the City's callable General Obligation Water Revenue Bonds, Series 2000A, dated April 1, 2000 (the "Prior 2000A Bonds "). The Prior 2000A Bonds were issued in the amount of $2,060,000 and are callable in the amount of $855,000. The savings will begin with a lower interest payment on August 1, 2010. Current interest rates are 5.2% to 5.5 %. Based on interest rates of 1.05% to 2.50 %, the estimated savings as a result of the refunding is approximately $67,205 after all fees and expenses. 3) To finance 2007, 2008 and 2009 water system improvements. 4) To finance 2007, 2008 and 2009 sanitary sewer system improvements. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475 and because they will be re -paid with utility revenue, the bonds do not count against the City's statutory debt limit. Funding Source(s): The Bonds will be general obligations of the City and as such are secured by a pledge of the City's full faith, credit, and taxing powers. For the Bonds it is the intent of the City to utilize water and sanitary sewer system revenues to make the annual principal and interest payments. Report October 20, 2009 Page 2 Debt Issuance Services Risk Factors: All bonds included within this report are general obligation bonds secured by the City's full faith, credit and taxing powers. This pledge helps improve the credit worthiness of the bonds and reduces interest costs. The pledge does mean that if any of the revenue expected to pay the debt service cost is not available that the City will increase the debt levy to pay the debt service. There is risk for this increase any time the full faith and credit pledge is provided. Arbitrage Monitoring: The City will need to monitor its debt service funds to insure compliance with IRS parameters and to avoid penalties for carrying too high of a balance during the life of the issue. Rating: The City currently carries a Standard & Poor's "AA -" credit rating on its outstanding bonds. We are proposing to have the Bonds rated by Standard & Poor's. If the lowest bidder on the Bonds elects to purchase bond insurance, the rating for the issue will be higher than the City's bond rating because this issue will instead carry the rating of the bond insurance company selected by the bidder. Bank Qualification: Because the City is issuing less than $30 Million in the calendar year, the City will be able to designate the Bonds as "bank qualified" obligations. Bank qualified status broadens the market for the Bonds. Term /Call Feature: The new money portion of this bond issue ($820,000 for water and $1,020,000 for sewer) is being issued for a 15 -year period with principal payments due on February 1 in the years 2011 through 2025. There are four years remaining on the refunded water revenue bonds with principal payments due on February 1, 2011 through 2015. Interest is payable each six months. The 2009B Bonds maturing February 1, 2019, and thereafter will be subject to prepayment at the discretion of the City on February 1, 2018. Other We will continue to monitor the market and the call dates for the City's Considerations: outstanding debt and will alert you to any future refunding opportunities. 0 Presale Report October 20, 2009 Page 3 Debt Issuance Services Proposed Debt Issuance Schedule Pre-Sale Review by Council: October 20, 2009 Distribute Official Statement: November 5, 2009 Conference Call with Rating Agency: November 10, 2009 City Council Meeting to Award Sale of the Bonds: November 17, 2009 Estimated Closing Date: December 15, 2009 Attachments Resolution Authorizing Ehlers to Proceed With Bond Sale Sources and Uses of Funds Proposed Debt Service Schedule Bond Buyer Index Ehlers Contacts: Financial Advisors: Rebecca Kurtz (651) 697-8516 Dave Callister (651) 697-8553 Bond Analysts: Diana Lockard (651) 697-8534 Debbie Holmes (651) 697-8536 Bond Sale Coordinator: Alicia Aulwes (651) 697-8523 The Official Statement for this financing will be mailed to the Council Members at their home address for review prior to the sale date. 40 Presale Report October 20, 2009 Page 4 CITY OF HOPKINS Hennepin County, Minnesota RESOLUTON NO. 2009 -057 Council Member introduced the following resolution and moved its adoption: Resolution Providing for the Sale of $3,340,000 General Obligation Bonds, Series 2009B WHEREAS, the City Council of the City of Hopkins, Minnesota, has heretofore determined that it is necessary and expedient to issue the City's $3,340,000 General Obligation Bonds, Series 2009B (the "Series 2009B Bonds "), to finance water and sanitary sewer improvements in the City, to current refund the General Obligation Storm Sewer Revenue Bonds, Series 1999C and to current refund the General Obligation Water Revenue Bonds, Series 2000A; and WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ( "Ehlers "), as its independent financial advisor for the Bonds and is therefore authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hopkins, Minnesota, as follows: Authorization; Findings The City Council hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening The City Council shall meet at 7:30 p.m. on November 17, 2009, for the purpose of considering sealed proposals for and awarding the sale of the Bonds. 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. The motion for the adoption of the foregoing resolution was duly seconded by Council Member and, after full discussion thereof and upon a vote being taken thereon, the following Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. Dated this 20 day of October, 2009. ATTEST: Eugene Maxwell, Mayor Terry Obermaier, City Clerk City of Hopkins, MN Proposed Current Refundings of Series 1999C and Series 2000A & New Money ($800K GO Water Rev, $1 M GO Sewer Rev) - 15 Yr Total Issue Sources And Uses Dated 11117/2009 ( Delivered 11117/2009 SerOOA Ser99C $2.06M GO New $ $1,645K Issue Wtr Ref Water New $ Sewer GO Strm Summary Sources Of Funds Par Amount qBonds $875,000.00 $820,000.00 $1,020,000.00 $625,000.00 $3,340,000.00 jotiIII So urces $875,000.00 S820,000-00 -0 .. ....... _ ... _ - $ - 1,020,000.0 . 0 -,— $625.000.00 $3,340,000.00 Uses Of Funds Total Underwriter's Dispouut-..�L.99�0o), 8,750.00 ..... . ...... 8,200-00 10,200.00 6,250.00 33,400.00 Costs of Issuance 9,955.09 9,329.34 11,604.79 7,110.78 _ 38,000.00 Deposit to Project Construction Fund - 800,000.00 1,00000000 �-1 800 000.00 Deposit to Current Refunding und ... .... 854,911.00 . ... ... - -- 609,936.50 1,464,847.50 Rou Amount 1,383.91 2,470.66 (1,804.79) 1,702.72 3,752.50 Total Uses $875,000.00 $820,000.00 $1,020,000.00 $625,000.00 $3,340,000.00 08 cur of Ser OOA $2,060, 1 Issue Summary 1 10/16/2009 1 10:27 AM City of Hopkins, MN Proposed Current Refundings of Series 1999C and Series 2000A & New Money ($800K GO Water Rev, $1M GO Sewer Rev) - 15 Yr Debt Service Schedule Date Principal Coupon Interest Total P +I 02/01/2011 380,000.00 Average Life — — w — 02/01/2012 395,000.00 80,345.00 02/01/2013 410,000.00 1.800% 02/ 01/2014 _ 420,0 484,815.00 02/01/2015 420,000.00 02/01/2016 115,000.00 58,405.00 02/01/2017 115,000.00 2.750% 02/01/2018 120,000.00 162,905.00 02/01/2019 125,000.00 02/01/2020 125,000.00 41,235.00 02/01/2021 135,000.00 3.450% 02/01/2022 135,000.00 162,395.00 02/01/2023 145,000.00 02/01/2024 145,000.00 28,582.50 02/01/2025 155,000.00 3.900% 1.050% 101,670.53 Average Life — — w — 481,670.53 1.400% 80,345.00 Net Interest Cost (NIC) _. _ - 475,345.00 1.800% 74,815.00 - Bond Yi for Arbitrage Purp — 484,815.00 2.150% 67,435.00 —_ 487,435.00 2.500% 58,405.00 478,405.00 2.750% 47,905.00 162,905.00 3.050% 44,742.50 159,742.50 3.200% 41,235.00 161,235.00 3.450% 37 162,395.00 3.600% 33,082.50 158,082.50 3.750% 28,582.50 163,582.50 3.900% 23,520.00 158,520.00 4.000% 18,255.00 163,255.00 4.100% 12,455 00 157,455.00 4.200% 6,510.00 161,510.00 Total $3,340,000.00 $676 $4,016,353.03 Yield Statistics Bo nd Year Do $21,041.56 Average Life — — w — — T _ 6.300 Years Average Coupon _.._,. - .............. — ...................... 3.2143680% Net Interest Cost (NIC) _. _ - 3.3731015% True Interest Cost TIC - _ ( ). -- - --- - - - - - -- - -- -- - - --- - - 3.336597 - Bond Yi for Arbitrage Purp — - -- - -- — 3.1546381% All Inclusive Cost (AIC) 3.5472374% IRS Form 8038 Net Interest Cost 3.2143680% _._... bt - -- ...... e-i - �. - -- ---- --1..1..1.1............ — weiged Average Maturity 6.300 Years 08 cur of Ser OOA $2,060, I Issue Summary 1 10/16/2009 1 10:27 AM City of Hopkins, MN $2 (31]. Water Revenue Bonds Series 2000A Original ^ ,� |�� ..~~ ~.~.�...~~~.~^.~=~.,i== Date PrinciDal Coupon Interest Total P+1 Fiscal Total uonumm .Mssee]Lif�_-____� 3.311 Years A __ ' ouo/omm ' 22,820o0 22,820.0 ' 02/01x2011 155,000o0 5.200« 22,820.0 177,820.0 200,640o0 omommn . /xJy000 18,790.00 ��Y�z /� 5.250% ____ 18,790 _� /��y»�� 08/01/2012 ' 1*,590.00 __ 14,590o0 __�Z�� 02/01/2013 170,000.00 5300m 14,590o0 184,590.00 1e9,180.0 owo/omo ' 10,085.0 10,085.0 ' 02w1/2014 180,000.00 5.400m 10,085.0 190,085.0 200170.00 08/01/2014 - - ��z�o - 02/01/2015 190,000.00 __ ____ 5.500% ____ 5,225.00 195,225.00 200,450.00 Total $855,000.00 � $143,020.00 $998,020.00 Yield Statistics .Mssee]Lif�_-____� 3.311 Years A __ ___�� __ ........ - _-__-_ __ _ ______ _—��o��l�� Refunding Bond Information Re�mftn Dated Dqq____ 11/17/2009 Refunding Delivery Date 11/17/2009 City of Hopkins, MN Proposed Current Refunding of $2,060,000 G.O. Water Revenue Bonds, Series 2000A Purpose One Debt Service Schedule Date Principal Coupon Interest Total P +I 02/01/2010 - - - - 02/01 /2011 170,000.00 1.050% 18,909.14 188,909.14 02/01/2012 170,000.00 1.400% 13,900.00 183,900.00 02/01/2013 175,000.00 1.800% 11,520.00 186,520.00 02/01/2014 180,000.00 2.1 8,370.00 188,370.00 02/01/2015 180,000.00 2.500% — 4,500. 184,500.00 Total $875,000.00 - $57,199.14 $932,199.14 Yield Statistics Bond Year Dollars _ ......- ....... _.. -- —...... ...._ ..................._.....— ....__..........._.-...................................................................... ............................... - -- -- $2,834.86 — ._............._....... Average Life — — _ 3.240 Years Averse Co upon 2.0177052% Net Inter Cost ( NIC) -- 2.3263623% True Interest Cost (TIC) 2.3346306% Bond Yield for Arbitrage Purposes - — - - .... ............................... 3.1546381 % — ... . _....._._ All Inclusive C ost (AIC) 2 .708120 6% -- IRS Form 8038 Net Interest Cost _ W 2.0177052% Weighted Average Maturity 3.240 Years 08 cur of Ser OOA $2,060, 1 Ser OOA $2.06M GO Wtr Ref 1 10/16/2009 1 10:27 AM Ehlers and • Leaders • City of Hopkins, MN Proposed Current Refunding of $2,060,000 G.O. Water Revenue Bonds, Series 2000A Purpose One Debt Service Comparison PV Analysis Summary (Net to Net) Gross PV Debt Service Savings._ . Net PV Cashtl Savin s 3.155% Bond Yield Contingency or Rounding Amount Net Present Value Benefit Net PV Benefit / $904,609.51 PV Refunded Debt Service Net PV B / $8 55,000 R efunded Principa Net PV Benefit / $875,000 Refunding Principal.. 60,012.06 60,012.06 – --------- ..............._....... - 1, -- $61.395.97 6.787% 7.181% 7.017% Refundinq Bond Information Refunding Date 11/17/2009 ...... - ..............._.. ._,...................................... .......................-- ,..... - - -- Refunding Delivery Date 11/17/2009 O8 cur of Ser OOA $2,060, 1 Ser OOA $2.06M GO Wtr Ref 1 10/16/2009 1 10:27 AM Net New Date Total P +I D/S Old Net D/S Savings 02/01/2010 - (1,383.91) - 1,383.91 02/01/2011 188,909.14 188,909.14 200,640.00 11,730.86 02/01/2012 183,900.00 183,900.00 197,580.00 13,680.00 02/01/2013 186,520.00 186,520.00 199,180.00 12,660.00 02/01/2014 188,370.00 188,370.00 200,170.00 — 11,800.00 02/01/2015 184,500.00 184,500.00 200,450.00 15,950.00 Total $932,199.14 $930,815.23 $998,020.00 $67,204.77 PV Analysis Summary (Net to Net) Gross PV Debt Service Savings._ . Net PV Cashtl Savin s 3.155% Bond Yield Contingency or Rounding Amount Net Present Value Benefit Net PV Benefit / $904,609.51 PV Refunded Debt Service Net PV B / $8 55,000 R efunded Principa Net PV Benefit / $875,000 Refunding Principal.. 60,012.06 60,012.06 – --------- ..............._....... - 1, -- $61.395.97 6.787% 7.181% 7.017% Refundinq Bond Information Refunding Date 11/17/2009 ...... - ..............._.. ._,...................................... .......................-- ,..... - - -- Refunding Delivery Date 11/17/2009 O8 cur of Ser OOA $2,060, 1 Ser OOA $2.06M GO Wtr Ref 1 10/16/2009 1 10:27 AM City of Hopkins, MN $820,000 G.O. Water Revenue Bonds, Series 2009 Purpose Two Debt Service Schedule Date Principal Coupon Interest Total P +l 02/01/2010 - - - - 02/01/2011 40,000.00 1.050% 30,871.26 70,871.26 02/01/2012 45,000.00 1.400% 25,187.50 70,187.50 02/01/2013 50,000.00 1.800% 24,557.50 74,557.50 02/01/2014 -__ _. 50,000.00 2.150% 23,65 50 73 657.50 02/01/2015 50,000.00 2.500% 22,582.50 72,582.50 02/01/2016 50,000.00 2.750% 21,332.50 71,332.50 02/01/2017 50,000.00 3.050% 19,957.50 69,957.50 02/01/2018 55,000.00 3.200% 18,432.50 73,432.50 02/01/2019 55, 000.00 -- ....................... 3.450% -- ...._. -. ... 16,672.50 - -- — — 71,672.50 02/01/2020 55,000.00 3.600% 14,775.00 69,775.00 02/01/2021 60,000.00 3.750% 12,795.00 72,795.00 02/01/2022 60,000.00 3.900% 10,545.00 70,545.00 02/01/2023 65,000.00 4.000% 8,205.00 73,205.00 02/01/2024 — -- ------- ............_. -.- — 65,000_00 — — 4.100% - — 5,605.00 - -- - - - -° - - -- 70,605.00 -- - -- 02/01/202 70,000.00 4.200% 2,940.00 72,940.00 Total $820,000.00 $258,116.26 $1,078 Yield Statistics Bo Year Dollar - — $7 Average Life - 8.803 Years — Average Coupon — 3_5757328% Net Interest Cost (NIC) 3.6893290% True Interest Cost TIC 3.6716031 Bond Yield fo Ar bitrage Purposes 3.15 46381 /o _ All Inclusive Cost AIC 3.8298395% IRS Form 8038 Net Int erest Co st 3.5757328% Weighted Average Maturity 8.803 Years 08 cur of Ser OOA $2,060, 1 New $ Water 1 10/16/2009 1 10:27 AM City of Hopkins, MN $1,020,000 G.O. Sewer Revenue Bonds, Series 2009 Purpose Three Debt Service Schedule Date Principal Coupon Interest Total P +I 02/01/2010 - - - - 02/01/2011 50,000.00 1.050% 38,345.71 88,345.71 02/01/2012 60,000.00 1.400% 31,282.50 91,282.50 02/01/2013 60,000.00 1.800% 30,442.50 90,442.50 02/01/2014 60,000.00 2.150% 29,362.50 89,362.50 02/01/2015 60,000.00 2.500% 28,072.50 88,072.50 02/01/2016 65,000.00 2.750% 26,572.50 91,572.50 02/01 /2017 65,000.00 3.050% 24,785.00 89,785.00 02/01/2018 65,000.00 3.200% 22,802.50 87,802.50 02/01/2019 70,000.00 3.450% 20,722.50 90,722.50 02/01/2020 70,000.00 3.600% 18,307.50 88,307.50 02/01/2021 75,000.00 3.750% 15,787.50 90,787.50 02/01/2022 75,000.00 3.900% 1 2,975.00 87,975.00 02/01/2023 80,000.00 4.000% 10,050.00 90,050.00 02/01/2024 80,000.00 4.10 6,850.00 86,850.00 02/01/2025 85,000.00 4.200% 3,570.00 88,570.00 Total $1,020,000.00 - $319,928.21 $1,339,928.21 Yield Statistics Bond Y Dollar _ $8,954.67 Averag Life - - - -- 8.779 Years Average Coupon ........ -..,.- - -.... - - ......_......... _ ..- 3.5727540% Net Interest Cost (NIC) - - -- _--- ------ - 3.6866611% True Interest Cost (TIC) — _..... - 3.6690681 Bo nd Yield for Arbitrage Pu orp ses - - — ._......I........ --- - --- -- 3.1546381% All Inclusive Cost IC) ^- v - 3.8 276608 % IRS Form 8038 Net Interest Cost 3.5727540% weighted Average Maturity 8 779 Years 08 cur of Ser OOA $2,060, I New $ Sewer 1 10/16/2009 1 10:27 AM Ehlers and Associates, Inc. Leaders • g- City of Hopkins, MN $1,545,000 G.O. Storm Sewer Revenue Bonds, Series 1999C Prior Original Debt Service Date Principal Coupon Interest Total P+1 Fiscal Total 02/0112010 Average Life - - . ...... . . .. . 3.312 Years 08/01/2010 - - 15,250.00 15,250.00 - 02/01/2011 110,000.00 5.000% 15,250.00 125,250.00 140,500.00 08/01/2011 - - 12,500.00 12,500.00 - 92/C) 1/2012 - - ' - 115,000.00 I I .... . .... . .... . . . . . . . ........... ... . 5.000% 12,500.00 .................. .............................. . . - 127,500.00 140,000.00 08/01/2012 9,625.00 9,625.00 02/01/2013 120,000.00 5.000% 9,625.00 129,625.00 139,250.00 08/01/2013 - - 6,625.00 6,625.00 - 02/0l/2014 130,000.00 5.000% 6,625.00 136,625.00 143,250.00 08/01/2014 - - 3,375.00 .. ........... . . . 3,375.00 - 02/01/2015 135,000.00 5.000% 3,375.00 138,375.00 141,750.00 Total $610,000.00 $94,750.00 $704 Yield Statistics Average Life 3.312 Years Weighted Average _Maturity _(Par _Basis) . ...... . . .. . 3.312 Years Average Coupon ................. 4.6896912% Refunding Bond Information Ref unding ;d Date ynqTg Dat_ 11/17/2009 Refunding Delivery Date 11/17/2009 Ser 99C $1.545K Go Strm S I SINGLE PURPOSE 1 10/16/2009 1 10:27 AM City of Hopkins, MN Proposed Current Refunding of $1,545,000 G.O. Storm Sewer Revenue Bonds, Series 1999C Purpose Four Debt Service Schedule Date Principal Coupon Interest Total P +I 02/01/2010 - - - 02/01/2011 120,000.00 1.050% 13,544.42 133,544.42 02/01/2012 120,000.00 1.400% 9,975.00 129,975.00 02/01/2013 125,000.00 1.800% 8,295.00 133,295.00 02/01 130,000.0 2.150% 6,045.00 136,045.00 02/01/2015 130,000.00 2.500% — 3,25 0.00 133,250.00 Total $625,000.00 - $41,109.42 $666,109.42 Yield Statistics Bond Year Dollars — $2,033 47 erage Ay Life 3.254 Years _ Averag C oupon — — _ _ -- — — — — 2.0216367% Net Int Cost (N1C) 2.3289927% True Int erest Cost -- — 2.3372874% Bond Yield for Arbitrage Purposes - - - -- 3.1546381% All Inc lusive Cos AIC 2.7092682% IRS Form 8038 Net Interest Cost _ 2.0216367% Weighted Average Maturity 3.254 Years 08 cur of Ser OOA $2,060, I Ser 99C $1,545K GO Strm 1 10/16/2009 1 10:27 AM Ehlers and Associates, Inc. Leaders • City of Hopkins, MN Proposed Current Refunding of $1,545,000 G.O. Storm Sewer Revenue Bonds, Series 1999C Purpose Four Debt Service Comparison PV Analysis Summary (Net to Net) Gross PV Debt Service Savings ..... ........ ....... Ne PV C ashflow Savin 9° /u(A IC)......... . .. Contingency or Rounding Amount .................. - -- ..... . ............._...... ......... .. - Net Present Value B enefit Net PV Benefit / $638,623.81 PV Refunded Debt Service - .._._._ ......__ - -....... — —.......... Net PV Benefit / $610 O 00 R efunded Principa Net PV Benefit / $625,000 Refundin al.. _ -- -- ._ - - - -- _ 35, 790.80 35,790.80 1,702.72 -- .._ - - - - -- - _. $37, 493.52 5.871% - 6.146% 5.999% Refunding Bond Information Refunding Dated Date — _...... -- ........... . . ........ . ............... 11/17/2009 Refunding Delivery Date 11/17/2009 08 cur of Ser OOA $2,060, I Ser 99C $1,545K GO Strm 1 10/16/2009 1 10:27 AM Net New Date Total P +I D/S Old Net D/S Savings 02/01/2010 - (1 - 1,702.72 02/01/2011 133,544.42 133,544.42 140,500.00 6,955.58 02/01/2012 129,975.00 129,975.00 140,000.00 10,025.00 02/01/2013 133,295.00 133,295.00 139,250.00 5,955.00 02/01/2014 _.... - - - ......._._. _ — 136,045.00 .... - - ........ - - - -. _— 136,045 00 - 143,250.00 7,205.00 02/01/2015 133,250.00 - -- 133,250.00 ..._..... - ...._..... 141,750.00 -- 8,500.00 Total $666,109.42 $664,406.70 $704,750.00 $40,343.30 PV Analysis Summary (Net to Net) Gross PV Debt Service Savings ..... ........ ....... Ne PV C ashflow Savin 9° /u(A IC)......... . .. Contingency or Rounding Amount .................. - -- ..... . ............._...... ......... .. - Net Present Value B enefit Net PV Benefit / $638,623.81 PV Refunded Debt Service - .._._._ ......__ - -....... — —.......... Net PV Benefit / $610 O 00 R efunded Principa Net PV Benefit / $625,000 Refundin al.. _ -- -- ._ - - - -- _ 35, 790.80 35,790.80 1,702.72 -- .._ - - - - -- - _. $37, 493.52 5.871% - 6.146% 5.999% Refunding Bond Information Refunding Dated Date — _...... -- ........... . . ........ . ............... 11/17/2009 Refunding Delivery Date 11/17/2009 08 cur of Ser OOA $2,060, I Ser 99C $1,545K GO Strm 1 10/16/2009 1 10:27 AM _ �' C O an u� d a a 0 W ro m m rx > Q y t0 O � M O a G o 0 L CL 0 co C m m C m - m - — l - - - - - - CO -- - - O — a a O � m W W 0 co N L d X r- m O) O a >� Of co QI - - -- - - 0 0 O O O O O o o O o 0 0 0 0 V N O W Cq V N O O O Nt N O -_ t0 to tD LO U) to LO N - V V V' V 2015 $2.11 2016 $2.16 2017 $2.21 these are the correct rates per the UMP WATER FUND - WORKING CAPITAL PROJECTION REVISED 10/16/2009 Actual Actual Projected Projected Projected Projected Projected Projected 2007 2008 2009 2010 2011 2012 2013 2014 Working Capital Beginning Year 473,284 20,267 (314,013) 87,418 (96,485) 245,305 268,452 110,373 Revenues: Operating Revenues 1,078,948 1,124,931 1,357,800 1,387,000 1,416,200 1,445,400 1,474,600 1,503,800 Other 57,600 63,679 62,000 30,000 30,000 30,000 30,000 30,000 Interest 14,651 0 11,000 6,726 7,408 8,708 8,169 5,696 Transfer In - Storm Sewer Bond Issuance 800.000 500,000 Total Revenues 1,151,199 1,188,610 2,230,800 1,423,726 1,953,608 1,484,108 1,512,769 1,539,496 Expenditures: Operation Expense 966,669 1,080,092 846,199 876,024 906,310 937,709 970,265 1,004,024 Other Exp - int on current bonds 67,727 66,915 57,170 26,518 Other Exp - int on refunded bonds 22,820 41,610 33,380 24,675 15,310 Other Exp - int on 2009 bonds 18,068 25,398 24,873 24,108 23,120 Other Exp - int on 2011 bonds 17,500 25,000 24,000 23,000 Transfer Out - Storm Sewer Loan Capital Outlay (per ERP) 22,555 15,970 0 12,200 0 0 134,800 0 Water System Maintenance Capital Improvements 376,582 188,606 741,000 462,000 381,000 170,000 208,000 80,000 Capital Improvements - PW Bldg Principal Bond payment 125,000 130,000 140,000 145,000 Principal Bond payment - refunded 155,000 160,000 170,000 180,000 Principal Bond pymnt - 2009 debt 40,000 45,000 50,000 50,000 Principal Bond pymnt - 2011 debt 20,000 20,000 25,000 Capital Lease (PW Facility) 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 Total Expenditures 1,603,533 1,526,583 1,829,369 1,607,629 1,611,818 1,460,962 1,670,848 1,445,454 Change in available funds (452,334) (337,973) 401,431 (183,903) 341,791 23,147 (158,079) 94,042 Inventory change (683) 3,693 Working Capital Ending Year 20,267 (314,013) 87,418 (96,485) 245,305 268,452 110,373 204,415 Rate History 2009 - 2017 financial data was taken from the Utility Master Plan done by City Engineer 1984 $0.85 1993 $1.05 Notes - 1997 $1.10 Income - 2008 and forward used utility master plan rates (fixture /no surcharge option) 2000 $1.20 2005 $1.40 2009 - Residential Street Improvements - $273,000; Meter Replacement - $95,000 Per Utility Master Plan (10107) Emergency Generator - Lake Elmo Plant - $373,000 2008 $1.65 2010 - Residential Street Improvements - $227,000; Meter Replacement - $95,000; 2009 $1.86 MSA Road Improvements - $140,000 2010 $1.90 2011 - Residential street impry - $75,000; Meter Replacement - $95,000; SLP Emergncy Connection - $211,000 2011 $1.94 2012 - Residential street improvements - $75,000; Meter Replacement - $95,000; 2012 $1.98 2013 - Residential street improvements - $80,000; Meter Replacement - $95,000; 2013 $2.02 projected rate Emergency Chlorine Shut Off Valves - $33,000 2014 $2.06 increases 2014 - Residential street improvements - $80,000; 2015 $2.11 2016 $2.16 2017 $2.21 these are the correct rates per the UMP Working Capital Beginning Year Revenues: Operating Revenues Grants /Other Govt Funding Other Interest Transfer In - Storm Sewer Fund Bond Issuance Total Revenues Expenditures: Operation Expense MWCC Charges (3% inflation) Interest Expense - 2009 Debt Interest Expense - 2011 Debt Transfer Out - Storm Sewer Fund Capital Outlay (per ERP) Met Council 1/1 Charge Capital Improvements Capital Improvements - PW Bldg Principal Bond payment (2009) Principal Bond payment (2011) Capital Lease (PW Facility) Total Expenditures Change in available funds Inventory change Working Capital Ending Year Rate History 1983 $1.50 1989 $1.75 1991 $2.00 1993 $2.50 1999 $2.25 Rate DECREASE 2006 $2.50 rate increase Per Utility Master Plan (10/07) 2008$2.70 2009$3.10 2010$3.40 2011 $3.70 2012$4.00 2013 $4.30 projected ate r 2014$4.60 increases 2015$4.90 2016$5.00 2017$5.25 these are the correct rates per the UMP 2009 - 2017 financial data was taken from the Utility Master Plan done by City Engineer Notes . Income - 2008 and forward used utility master plan rates (no fixture option) 2009 - Residential Street Improvements - $200,000; MSA Road Improvements - $50,000 2010 - Residential Street Improvements - $150,000; Lift Station #4 - $160,000; Upgrade Lift Station #1 - $220,000 Lift Station #4 - $80,000 and Lift Station #1 - $110,000 -- revenue from other governments 2011 - Residential Street Improvements - $100,000; 2012 - Residential Street Improvements - $100,000; Lift Station Maintenance4 - $15,000 2013 - Residential Street Improvements - $100,000; 2014 - Residential Street Improvements - $100,000; SEWER FUND - WORKING CAPITAL PROJECTION REVISED 1011612009 Actual Actual Projected Projected Projected Projected Projected Projected 2007 2008 2009 2010 2011 2012 2013 2014 414,387 (17,786) (397,606) 324,762 137,197 855,089 773,414 777,591 1,409,057 1,453,029 1,767,000 1,938,000 2,109,000 2,280,000 2,451,000 2,622,000 190,000 18,618 21,445 24,000 23,000 23,000 23,000 20,000 20,000 11,207 0 6,000 5,007 23,967 22,270 27,596 33,415 1,000,000 800,000 1,438,882 1,474,474 2,797,000 2,156,007 2,955,967 2,325,270 2,498,596 2,675,415 584,770 541,276 676,057 671,926 693,479 715,749 738,762 762,545 1,024,373 1,072,061 1,098,575 1,149,204 1,288,051 1,365,334 1,447,254 1,534,089 22,442 31,545 30,863 29,903 28,718 25,000 40,000 38,500 37,000 0 0 0 0 0 0 0 35,700 212,079 186,991 250,000 450,000 100,000 115,000 100,000 100,000 50,000 60,000 60,000 60,000 30,000 30,000 35,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 1,871,222 1,850,328 2,074,632 2,343,572 2,238,075 2,406,946 2,494,419 2,643,052 (432,340) (375,854) 722,368 (187,565) 717,892 (81,676) 4,178 32,364 167 (3,966) (17,786) (397,606) 324,762 137,197 855,089 773,414 777,591 809,955 2009 - 2017 financial data was taken from the Utility Master Plan done by City Engineer Notes . Income - 2008 and forward used utility master plan rates (no fixture option) 2009 - Residential Street Improvements - $200,000; MSA Road Improvements - $50,000 2010 - Residential Street Improvements - $150,000; Lift Station #4 - $160,000; Upgrade Lift Station #1 - $220,000 Lift Station #4 - $80,000 and Lift Station #1 - $110,000 -- revenue from other governments 2011 - Residential Street Improvements - $100,000; 2012 - Residential Street Improvements - $100,000; Lift Station Maintenance4 - $15,000 2013 - Residential Street Improvements - $100,000; 2014 - Residential Street Improvements - $100,000; STORM SEWER FUND - WORKING CAPITAL PROJECTION Working Capital Beginning Year Revenues: Operating Revenues Other Interest Transfer In - Water Fund Transfer In - Sanitary Sewer Fund Bond Issuance Total Revenues Expenditures: Operation Expense Bond Interest - existing bonds Bond Interest - refunded bonds Transfer Out - Water Fund Transfer Out - Sanitary Sewer Capital Outlay (per ERP) Capital Improvements Capital Improvements - PW Bldg 1999 Principal Bond payment 1999 Principal Bd pymnt - refundg 2001 Principal Bond payment 2003 Principal Bond payment Capital Lease Total Expenditures Change in available funds Working Capital Ending Year Rate History (per month) 1989 $4.75 per quarter 1991 $6.00 per quarter 1992 $2.50 1993 $3.00 1998 $3.20 1999 $4.00 2006 $4.50 2009 $5.00 REVISED 10/16/2009 Actual Actual Projected Projected Projected Projected Projected Projected 2007 2008 2009 2010 2011 2012 2013 2014 923,842 598,454 351,098 377,165 284,785 517,767 760,513 991,984 716,710 716,957 802,140 802,140 802,140 802,140 802,140 802,140 8,069 8,072 8,000 5,000 5,000 5,000 5,000 5,000 40,171 10,209 30,000 24,775 5,324 13,670 20,500 26,486 764,950 735,238 840,140 812,464 820,810 833,626 831,915 827,640 126,914 133,548 141,392 174,257 179,637 185,187 190,912 194,730 106,320 93,956 86,681 55,789 60,095 52,751 45,008 36,808 15,250 27,750 22,125 16,250 10,000 0 0 0 0 0 0 0 0 482,104 365,090 196,000 264,000 117,000 118,000 129,000 330,000 95,000 100,000 100,000 110,000 115,000 12 0, 000 130,000 135,000 205,000 215,000 215,000 225,000 50,000 50,000 50,000 55,000 55,000 55,000 60,000 60,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 1,090,338 982,594 814,073 924,296 579,482 578,063 596,170 791,538 (325,388) (247,356) 26,067 (92,381) 232,982 242,747 231,471 42,088 598,454 351,098 377,165 284,785 517,767 760,513 991,984 1,034,072 2009 - 2017 financial data was taken from the Utility Master Plan done by City Engineer Notes - 2009 - Residential Street Imp - $180,000; Storm Drainage System Maintenance - $16,000; 2010 - Residential Street Improvements - $70,000; Citywide Concrete Alley's - $11,000; Storm Drainage System Maint - $16,000; MSA Road Improvements - $167,000 2011 - Residential Street Improvements - $100,000; Storm Drainage Maint - $17,000 2012 - Residential Street Improvements - $100,000; Storm Drainage Maint - $18,000 2013 - Residential Street Improvements - $100,000; Storm Drainage Maint - $19,000 2014 - Residential Street Imp - $110,000; Storm Drainage Maint - $20,000; Storm Water Mgmt Projects - $200,000