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<br />Jur <br /> <br /> <br />920 Second Avenue South <br />Suite 1400 <br />Minneapolis, MN 55402 <br /> <br />A Division of Miller Johnson Steichen Kinnard <br /> <br />(800) 950-4666 <br />(612) 370-2940 <br /> <br />T.' :(1~\ :~r ~9H' <br /> <br />E X T ERN A L <br /> <br />MEMORANDUM <br /> <br />DATE: July 29, 2002 <br /> <br />TO: Ms. Heidi Amson <br /> <br />FROM: Paul R. Donna <br />Juran & Moody <br /> <br />RE: North Metro Telecommunications Commission, Minnesota <br />Preliminary Bond Financing <br /> <br />Attached please fInd the preliminary bond structure and debt service schedule you requested. <br /> <br />I have assumed the Commission requires $1,500,000 for project costs. To that amount we have <br />added the estimated rmancing costs and debt service reserve fund and arrived at a total borrowing <br />of $1,745,000. The debt service reserve fund is required to successfully market the bonds. I have <br />assumed you would capitalize the required amount (1 year's debt service or $174,000) into the <br />bond issue. However, if you have funds on hand that can be designated for this purpose over the <br />life of the bonds we could reduce the total borrowing by that amount. I have also assumed the <br />reserve fund is put to work by earning 5% and the interest earnings are applied towards debt <br />service and applied towards the last payment on the bonds. <br />In addition, I have not assumed any equity contribution or interest earnings during construction <br />that could be used to reduce the total borrowing. <br /> <br />Additional assumptions include a closing in December 2002 for a spring 2003 construction and <br />level annual debt payments with interest paid semi-annually beginning on August 1, 2003 with <br />principal and interest due each February 1 starting in 2004. The fInal payment would be February <br />1 2017 - the term of the bonds cannot exceed the term of the Franchise Contract. <br /> <br />I also assumed the Bonds would notbe ''Bank QualifIed"which means the total tax-exempt debt <br />issued by all 7 member cities would exceed $10,000,000 for the calendar year. This costs us <br />about .25% or roughly $40,000 in total interest cost over the life of the issue. <br /> <br />After reviewing this information please call me if you have any questions or would like <br />modifications made. Also, I would be happy to discuss the security structure, requirements and <br />process with you and or the Commission in greater detail at any time. <br /> <br />I look forward to working with you! <br />