City Council Meeting Date: July 18, 2017
To: Mayor and City Council
City Administrator
From: Brenda Angelstad, Finance Director
Title
Consider Resolution Providing for the Sale of $970,000 General Obligation Improvement Bonds, Series 2017A, and $460,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2017B.
Body
Action Requested:
The Northfield City Council considers the attached Resolution providing for the Sale of $970,000 General Obligation Improvement Bonds, Series 2017A, and $460,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2017B.
Summary Report:
Presidential Commons is a tax increment district created in 1999 between the HRA and Northfield WNS Inc. The project was for 84 townhomes, 75 of the units were to be made into affordable housing with income limits for the buyers. For several years, the district is not producing enough revenue to cover its bond payments. According to state statute, we are not allowed to let the cash balance of a TIF district go negative. In 2013, Council approved a loan of $50,000 to the Presidential Commons district, from the TIF #4 district. Another $50,000 loan was approved in 2014, also from TIF #4 district, and a third loan in the amount of $15,000 was approved in 2016, again from the TIF #4 district. The 2017 increment will also not be enough to pay the bonds, and we do not anticipate the district to be able to pay its debt without assistance for the next several years.
The bonds for Presidential Commons were refunded in 2007, and go through 2022. The interest rate on the current bonds is approximately 5.5%. The Presidential Commons district is due for decertification in 2026.
The bonds for Presidential Commons are callable in Feb of 2017. If interest rates stay low, we anticipate being able to get a lower rate if we refund the bonds. We are looking at doing a refunding at the same time we issue bonds for our street project, and extending the term of the bonds s...
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