HomeMy WebLinkAboutOctober 3, 2006
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1685 CROSSTOWN BOULEVARD N,W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 . WWW.CI.ANDOVER.MN.US
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
October 3, 2006
6:00 p.m.
Conference Rooms A & B
AGENDA
1. Call to Order - 6:00 p.m.
2. Approval of Minutes (9/19/06 Regular Mtg.)
3. Consider Parameters Resolution/Community Center Refinancing
o 4. Update on Economic Development Activities
5. Other Business
6. Adjourn
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ANDOVER ECONOMIC DEVELOPMENT AUTHORITY MEETING
OCTOBER 3, 2006 - MINUTES
A Meeting of the Andover Economic Development Authority was called to order by Vice President
Julie Trude, October 3, 2006, 6:01p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW,
Andover, Minnesota.
Present:
President Mike Gamache, Commissioners Don Jacobson, Mike
Knight; Voting resident members Joyce Twistol and Robert Nowak
Commissioner Ken Orttel, Edward Schultz (Advisor to the EDA)
Executive Director, Jim Dickinson
Community Development Director, Will Neumeister
City Attorney, William Hawkins
Others
Absent:
Also present:
APPROVAL OF MINUTES
September 19, 2006: Correct as written.
MOTIONby Jacobson, Seconded by Knight, approval of the Minutes as written. Motion carried 4
ayes, 1 present (Nowak).
CONSIDER PARAMETERS RESOLUTION/COMMUNITY CENTER REFINANCING
Executive Director Dickinson explained activity in the current bond market is indicating that
there may be an opportunity for the EDA to potentially save some significant long term debt
service expense by refinancing the EDA's $19,640,000 Public Facility Lease Revenue Bonds,
Series 2004.
Mr. Mark Ruff of Ehlers and Associates and Mr. Paul Donna of Northland Securities were at the
meeting to answer questions.
Commissioner Jacobson asked if there is any way to refinance the bonds and get the savings up
front.
President Gamache arrived at 6:04 p.m.
Mr. Dickinson indicated paragraph one, authorization of the motion, will include $800,000 and 3
percent. This is the minimum required by State Law.
o Andover Economic Development Authority Meeting
Minutes - October 3, 2006
Page 2
Mr. Donna reviewed the refinancing scenarios with the Commission.
Scenario one shows a $933,000 dollar savings. The average coupon is 5.25% on the old bonds;
the coupons can be replaced with 4.47%. Scenario two shows a total savings of $1.6 million.
The third scenario, crossover reverse financing, total net savings is $1,055,000. They are closer
to four percent on two of the scenarios.
Mr. Nowak wondered what caused the change since June. Mr. Donna stated the Feds stopped
increasing the rates and the economy is not any better than what some people thought. This has
been keeping the long term rates down while the short term rates remain high.
Commissioner Jacobson asked what the highest interest rate is they could use to refinance the
bonds and still maintain the qualifications. Mr. Donna stated this is very interest rate sensitive.
Based on these numbers, they are at about one million dollars; the minimum level they would
need to meet the State test is $800,000.
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Commissioner Knight asked what scenario is being recommended to the EDA. Mr. Dickinson
stated he would recommend maintaining the same debt service but take the savings. He stated
they should get more long term savings because they do not need the money up front for cash
flow.
Commissioner Knight asked if the YMCA needs to be involved in this decision. Mr. Dickinson
indicated they have a lease agreement with the YMCA and this should not change.
Mr. Dickinson stated the $1,000,000 will be over the life of the bonds and they will use the
current debt service to get them through the cash flow.
Commissioner Jacobson asked what will happen if they do not receive the funds from the YMCA
in 2010. Mr. Dickinson indicated they would then reevaluate the cash flow statements.
Commissioner Trude thought they would just take over the building. Mr. Dickinson stated they
would use the debt fund balance to make the payments and he did not think there would be a
problem.
Mr. Ruff stated there is a fourth option, which is to do nothing. He stated with this kind of
advance financing, they are saying these rates will be the lowest from now until 2014. They can
only refinance the bonds once before the bonds call date in 2014.
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Commissioner Trude stated one of the advantages in doing this is they are making money on
arbitrage. Mr. Ruff stated they are not making any money but they are saving money on interest.
Commissioner Jacobson thought if they approve this resolution, they would put a time limit on it
000 or 45 days. Mr. Dickinson stated they could do this. Mr. Ruff thought early January tends
to be a slow time for bonds. Mr. Dickinson thought 120 days would be a good time limit.
o Andover Economic Development Authority Meeting
Minutes - October 3, 2006
Page 3
Commissioner Trude stated in the resolution they need to change Mr. Dickinson's title to
Executive Director.
Motion by Trude, Seconded by Knight, approval of the attached Resolution approving the issuance
of Public Facility Lease Revenue Refunding Bonds (City of Andover Community Center), Series
2006A with specific criteria in the blanks based on discussion at the meeting with the amendments
discussed with a time limit of 120 days. Motion carried unanimously. Resolution R002-06)
UPDATE ON ECONOMIC DEVELOPMENT ACTIVITIES
Community Development Director Neumeister reviewed the EDA activities related to Andover
Station North that the City staffhave recently been engaged in with the Commission.
Commissioner Trude thought staff should get Bruggeman Homes the survey information to try to
sell the townhomes.
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OTHER BUSINESS
There was none.
Motion by Jacobson, Seconded by Knight, to adjourn. Motion carried IImmimously. The meeting
adjourned at 6:37 p.m.
Respectfully submitted,
Susan Osbeck, Recording Secretary
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