2013.07.16 Work Session Packet (1st)CRYSTAL CITY COUNCIL
FIRST WORK SESSION AGENDA
Tuesday, July 16, 2013
6:30 p.m.
Conference Room A
Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the
City Charter, the first work session of the Crystal City Council was held at ______ p.m.
on Tuesday, July 16, 2013 in Conference Room A located at 4141 Douglas Drive,
Crystal, Minnesota.
I. Attendance
Council members Staff
____ Selton ____ Norris
____ Adams ____ Therres
____ Budziszewski ____ Norton
____ Deshler ____ Hansen
____ Hoffmann ____ Revering
____ Libby ____ Serres
____ Peak
II. Agenda
The purpose of the work session is to discuss the following agenda item:
· County Road 81 bonds
III. Adjournment
The work session adjourned at ______ p.m.
Memorandum
DATE: July 10, 2013
TO: Mayor and City Council
FROM: Anne Norris, City Manager
Charles Hansen, Finance Director
SUBJECT: Discussion of the sale of $395,000 Street Reconstruction Bonds, Series
2013B.
BACKGROUND:
In 2009, the City of Crystal agreed to make a local matching contribution to the
reconstruction of Hennepin County Highway 81. This contribution was to be about
$4,000,000, depending on final actual construction costs. Hennepin County agreed to
provide interest free financing of $2,600,000, to be in the form of bonds supported by a
property tax levy. The remaining $1,400,000 contribution is to come from the EDA, city
utility funds and special assessments.
Bonds in the amount of $2,205,000 were sold to Hennepin County in 2010. The City
has been levying property taxes to repay these bonds. Actual and planned tax levies
are $534,565 for collection in 2010, 2011 & 2012; $563,153 in 2013 and $148,404 in
2014. You may notice that these levies add up to $2,315,250. State law requires the
City to levy 5% more than the debt service payments to cover possible shortfalls in tax
collections. In fact, there has been a shortfall due to the non-payment of part of the
Market Value Homestead Credit by the State.
BOND SALE:
The City signed right of way acquisition and construction agreements with Hennepin
County which commit the City to pay the local matching contribution for the segment
from Bass Lake Road to the north city limits. The last $395,000 from the 2009 bonding
authority is needed to make this payment. If the bonds were not sold, the city would still
have to make the payment to the county. The only alternative would be to take the
money from the fund balance of one of the capital funds.
It is necessary to sell the final $395,000 of bonds to Hennepin County this summer so
that the property tax may be levied for collection in 2014. The 5% over levy is again
required, so the property tax levy will be $414,750. Total property tax levies for the two
bond issues in 2014 will be $563,153, the same as the 2013 property tax levy.
CONCLUSION:
We propose to place a resolution for the sale of these bonds on the agenda of the
August 5, 2013 City Council meeting. A draft of the resolution providing for the sale of
$395,000 General Obligation Street Reconstruction Bonds, Series 2013B was prepared
by Kennedy & Graven and is attached.