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D DA Parkers Prairie Office: <br /> �.;,; `�--- 13979 County Highway 42 <br /> ' �� Parkers Prairie, MN 56361 <br /> � � David Drown Associates, Inc. (612)920-3320 ext. 110 �fax(612)605-2375 <br /> — Public Finance Advisors www.daviddrown.com <br /> July 3,2018 <br /> RECOMMENDATIONS LETTER <br /> Ms. Nancy Adams, Mayor <br /> Ms. Nancy Malecha,City Administrator <br /> City of Pequot Lakes <br /> 4638 Main Street <br /> Pequot Lakes, MN 56472 <br /> RE: 2018A General Obligation Tax Abatement Bonds <br /> Honorable Mayor Adams, Members of City Council,and Ms. Malecha: <br /> This letter outlines our recommendations for the structure and sale of General Obligation Bonds associated <br /> with the City's 2018 Trailside Park project and adjacent street and utility work. <br /> Overview of Proiect and Comqonent Costs <br /> The City of Pequot Lakes has initiated the master planning for the improvements to Trailside Park and <br /> related street and utility improvements adjacent to the park. The major component costs and sources of <br /> funds are detailed as follows: <br /> Trailside Park Improvements 1,998,508 <br /> Adjacent Street and Utility Improvements 838,850 . <br /> Contingency 279,751 ` <br /> Engineering 567,472 <br /> TOTAL CAPITAL COSTS 3,684,581 ' <br /> Plus Issuance Costs 83,500 II <br /> Surplus Funds 4,419 �' <br /> Less: Park Donations (265,000) <br /> Less:Sourcewell Contribution (7,500) , <br /> RECOMMENDED SIZE OF BOND ISSUE: 3,500,000.00 ' � <br /> Statutorv Authoritv <br /> Cities must cite the specific statutory authority they intend to use before issuing general obligation � <br /> bonds. In this instance,we are advising the utilization of a single piece of authority as described below: <br /> The bonds will be issued as a General Obligation Tax Abatement Note utilizing authority provided <br /> in Minnesota Statutes Chapters 469 and 475. By pledging abated taxes from benefitting <br /> properties, the City can issue this portion of the debt without the need to utilize special <br /> assessments. Further,this type of debt does not count against any statutory debt limits. The only <br /> issue is the need to identify the target parcels and hold a public hearing. On a final note,while we <br /> identify target parcels for the abatement, the City will, in reality, be levying across the entire tax <br />