City Council Meeting Date:
To: Mayor and City Council
From: Melanie Lammers, Finance Director
Ben Martig, City Administrator
Title
Consider approving Resolution authorizing refunding of Hospital Bonds
Body
Action Requested:
The Northfield City Council is being asked to approve the attached resolution authorizing the Hospital to Refund Revenue Bonds and issue new money.
Summary Report:
The Northfield Hospital is requesting the City Council approve the private placement issuance of $25,000,000 in bonds. $22,395,000 of these bonds is a refund for 2006 bonds that currently have an average interest rate of 5.3%. The balance of $2,605,000 is new money for the hospital, and will count against the bank qualified amount for the City of Northfield. This will leave $7,395,000 of bank qualified money available, plenty for our anticipated 2016 bond issues. The anticipated interest rate on the $25,000,000 is around 2.72%. This will save the hospital millions of dollars in interest costs over the next 15 years.
Council is being asked to approve a resolution with parameters, so the Hospital can close on the bond issue later in the week after council approval. The indenture is available for review at City Hall.
Financial Impacts:
The new money in the issue will use a small portion of the Cities $10,000,000 in bank qualified money. The City has plenty of room to issue bank qualified bonds for its 2016 projects, with room for more if necessary.
Tentative Timelines:
The Hospital would like to close on the bonds the week of August 2nd, so council needs to approve the attached resolution for this timeline to happen.