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09.d5 2024 Street Project Bonding Staff Report Date of Meeting: February 20, 2024 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: 2024 Street Project Bonding Background: As City Engineer Ryan Goodman presented, the bids for the 2024 Street Project came in favorably. The initial bid, plus the additional streets and the remaining engineer, testing, and project oversite costs, bring the total cost of the 2024 Street Project to around $3,300,000. The City budgeted $4,000,000 for this project. Staff and the engineer are recommending that the Council consider including a crack filling and seal coating project this year, taking advantage of the lower-than-budgeted bid amount. The project presented by the engineer includes the work scheduled for 2025, 2026, and 2027. Completing this work within the 2024 Street Project bond would reduce the City’s cash outlay out of the 408 CIP in the coming years. Jason Aarsvold, Senior Municipal Advisor from Ehlers, will be at the meeting to discuss the issuance of bonds to pay for the project. Below is a Schedule of Events for the bond issuance. Also, below are two bond options. One is for a $3,300,000 project, and the other is for a $4,000,000 project. Both issuance options include additional issuance costs and the first interest payment, due in February 2025, since the City did not levy monies in 2024 to cover that payment. Options: 1) Proceed with the Schedule of Events for the Issuance of GO Bonds to pay for the 2024 Street Project 2) Table Discussion of GO Bond Issuance Recommendation: Option 1 Attachments: Schedule of Events $3,490,000 GO Bond option $4,220,000 GO Bond option Updated 408 CIP Fund CITY OF SCANDIA CAPITAL IMPROVEMENT PLAN LOCAL ROAD IMPROVEMENT FUND 408 Inflation Assumptions 1 Revenue (Non-property tax)2.00%2.00%2.00%2.00%2.00%2.00%2.00%2.00%2.00% 2 Interest Earnings 1.50%3.50%3.50%3.50%3.50%3.50%1.50%1.50%1.50% 3 Expenses 3.00%3.00%3.00% 4 CIP Inflation Factor 0.00%4.00%4.00%4.00%4.00%4.00%3.00%4.00%4.00% 2022 2023 2024 2025 2026 2027 2028 2029 2030 Actual Projected REVENUE 5 Property taxes 216,860 212,012 375,000 400,000 416,000 432,640 449,946 467,943 486,661 6 Debt levy - 384,996 384,996 384,996 384,996 384,996 656,955 7 Special assessments 8 Investment Income 4,655 12,115 10,705 20,504 14,863 6,855 (831) (11,585) (20,965) 9 Refunds and Reimbursements 10 Intergovermental 17,744 11 Rental and lease income - - - - - - - - - 12 Miscellaneous Revenue - - - - - - - - - 13 Total Revenue 239,259 224,127 385,705 805,499 815,859 824,491 834,110 841,354 1,122,651 EXPENSES 14 Total Current 15 Debt service 366,662 366,662 366,662 366,662 366,662 366,662 16 Principal 17 Interest 18 Total Capital Projects 595,069 815,000 4,105,745 600,000 678,000 709,120 1,184,365 1,100,000 1,100,000 19 Total Expenses 595,069 815,000 4,105,745 966,662 1,044,662 1,075,782 1,551,027 1,466,662 1,466,662 20 Revenue Over / (Under) Expenses (355,810) (590,873) (3,720,040) (161,163) (228,804) (251,292) (716,918) (625,309) (344,011) OTHER FINANCING SOURCES / (USES) 21 Bond Proceeds 4,000,000 1,000,000 22 Bond premium 23 Transfers In 24 Transfers Out 25 Transfers Out- 25 Total Other Sources / (Uses)- - 4,000,000 - - - - 2,000,000 26 Prior Period Adjustments 27 Ending Fund Balance 896,739 305,866 585,826 424,663 195,860 (55,432)(772,350)(1,397,658)258,331 CITY OF SCANDIA Financial Management Plan Local Road Improvement Fund 408 CA S H F L O W A N A L Y S I S Project Multiple 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 Capital Project Name Number Year?First Year Last Year Costs Actual Proposed Est. 28 28 Soil Borings for 2024 & 2025 PW-061 2023 20000 25,000 29 Soil Borings for 2026 & 2027 PW-062 2025 20000 25,000 30 Soil Borings for 2028 & 2029 PW-069 2027 20000 28,000 31 Engineering Fees PW-070 100000 100,000 75,000 78,000 81,120 84,365 32 2022 Local Road Improvement Project PW-043 2022 707200 707,200 33 2023 Local Road Improvement Project PW-043 2023 671745 671,745 34 2023 Seal Coat & Crack Filling Project PW-050 2023 168374 168,374 2024 Seal Coat & Crack Filling PW-2024 620,000 35 2024 Local Road Improvement Project PW-056 2024 2755745 3,385,745 36 2025 Local Road Improvement Project PW-053 2025 540000 500,000 37 2025 Seal Coat & Crack Filling PW-052 2025 252000 38 2026 Local Road Improvement Project PW-035 2027 870000 600,000 39 2026 Seal Coat & Crack Filling Project PW-051 2027 335000 40 2027 Local Road Improvement Project PW-057 2028 900000 600,000 41 2027 Seal Coat & Crack Filling PW-060 2028 78000 42 2028 Local Road Improvement Project PW-036 2029 1000000 1,100,000 43 2029 Local Road Improvement Project PW-060 2030 860000 - 1,100,000 44 2030 Local Road Improvement Project PW-072 2031 880000 - 1,100,000 45 2031 Local Road Improvement Project PW-073 2032 1000000 - 46 Total Capital Projects 11,178,064 - 707,200 865,119 4,105,745 600,000 678,000 709,120 1,184,365 1,100,000 1,100,000 PROJECTED NEW DEBT TERMS 47 Par Amount (Line 14)- - - 4,220,000 - - - - 2,000,000 48 Number of Years 9 15 15 15 15 15 15 15 15 10 49 Interest Rate 2.00%2.50%3.51%5.00%5.00%5.00%5.00%5.00%5.00% 50 New Debt Levy 0 0 0 0 384,996 384,996 384,996 384,996 384,996 384,996 Lo c a l R o a d P r o j e c t O u t l a y Project