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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.con� <br /> February 3,2020 <br /> RECOMMENDATIONS <br /> Mr.James Tayloe, Mayor <br /> Ms. Nancy Malecha, City Administrator <br /> City of Pequot Lakes <br /> 4638 Main Street <br /> Pequot Lakes, MN 56472 <br /> RE:General Obligation Disposal System and Utility Revenue Bonds,Series 2020A <br /> Honorable Mayor Tayloe, Members of the City Council, and Ms. Malecha: <br /> This letter outlines our recommendations for the structure and sale of General Obligation Bonds <br /> associated with the City's 2020 Rasmussen Road project. <br /> Overview of Project and Component Costs <br /> The major component costs and sources of funds are detailed below: <br /> Construction $ 2,396,792 <br /> Engineering(design,construction,study,geotech) $ 384,497 <br /> Contingency $ 150,000 <br /> Admin/Legal $ 50,000 <br /> Total Project Costs $ 2,981,289 <br /> Plus Issuance Costs (inlcuding discount) $ 66,188 <br /> Plus Capitalized Interest/Rounding $ 18,024 <br /> Less-402 Fund Contribution/Budget Allocation $ (943,000) <br /> Less-Sourcewell Contribution $ (7,500) <br /> RECOMMENDED SIZE OF BOND ISSUE $ 2,115,000 <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 two separate pieces of authority as described <br /> below: <br /> Approximately $1,055,000 of the bonds should be issued as General Obligation Disposal System Bonds <br /> utilizing authority provided in Minnesota Statutes Chapters 115 and 475. This authority allows us to fund <br /> sanitary sewer related costs and pledge sewer revenues,tax levies,or a blend of both. It requires no public <br /> hearings and does not count against any statutory net debt limits. <br /> The remaining $1,060,000 of the bonds should be issued as General Obligation Utility Revenue Bonds <br /> utilizing authority provided in Minnesota Statutes Chapters 444 and 475. This portion of the bonds will be <br /> utilized to cover the water system related costs of the project. We must pledge water revenues to the <br />