9.a) Staff Report-Fire Tanker BondSCANDIA
Staff Repovt
Date of Meeting: June 16, 2015
To: City Council
From: Kristina Handt, Administrator
Re: Resolution to Approve $215,000 G.O. Equipment Certificate for Fire Tanker
Background:
At the May Council meeting, the purchase of a new fire tanker was approved. There was discussion
about ways to finance it. The Council asked staff to get quotes on borrowing. We received a quote
from US Bank with an interest rate of 2.68%. The other quote, from Security State Bank, was lower.
The interest rate adjusts each year starting at 1.4%, 1.65%, 1.9%, 2.1% and 2.3%.
Issue:
Should the Council bond for the purchase of the Fire Tanker?
Proposal Details:
Included in your packet is a resolution to award the sale of the bonds and providing for the
payments on the bonds to come from the general tax levy. Asst. City Attorney Andy Pratt has
prepared the bond documents and resolution.
Fiscal Impact:
Next year's projected payment is $47,020.50. A draft budget has been prepared that will not
require extra tax levy for this in 2016. Instead staff is proposing to reassign the special
assessment revenue ($20,000) from the 2007 Road Bond (anticipated early payoff this year with
fund balance) and remaining debt service fund balance of at least $30,000. Two equipment
certificates will be paid off in 2016 (about $75,000) so that tax levy could then be directed to the
fire tanker bond in 2017 without needing to increase the tax levy in the debt service fund.
Options:
1) Approve Resolution 06-16-15-05
2) Amend and then Approve Resolution 06-16-15-05
3) Do not approve the resolution. Direct staff to pay for the purchase from the Equipment
Replacement Fund
Recommendation:
Option 1.