Title
Directing city staff to maintain financial structural balance with respect to the prepayment of the District Energy note to the City of Saint Paul.
Body
WHEREAS, District Energy and District Cooling have franchise agreements with the City of Saint Paul that expire on December 12, 2027; and
WHEREAS, District Energy has outstanding bonds in the amount of $49,385,000 and District Cooling has outstanding bonds in the amount of $50,155,000, with maturities through 2029; and
WHEREAS, District Energy also has a note to the City that is subordinate to the above referenced bonds; and
WHEREAS, the District Energy Note to the City has an outstanding balance of $9,664,122, with a final maturity of 12/01/2021; and
WHEREAS, given the recent low-interest rate environment, District Energy is contemplating refinancing existing variable-rate debt into fixed-rate mode to achieve interest rate savings and budgetary stability; and
WHEREAS, at the time of refunding the Bonds, District Energy is contemplating prepayment of the City Note; and
WHEREAS, prepayment of the loan is allowed under the terms of the City Note; and
WHEREAS, the City has long-term budget plans that incorporate a payment stream over the life of the City Note as attached in Exhibit A; and
WHEREAS, it is the intent of the Administration and the Council that any proceeds of a prepayment continue to be used as currently contemplated in the long-term budget plans to maintain structural balance; and
WHEREAS, it is prudent that the prepayment amount be based on mutually agreed upon (by City and District Energy) present value calculation of the outstanding balance based on current market rates.
NOW THEREFORE, BE IT RESOLVED THAT, City Staff shall work with District Energy to mutually agree upon a prepayment amount given the present value calculation of the outstanding balance, based on current market rates, with a long-term budget plan consistent with the current loan schedule in order to maintain financial str...
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