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REQUEST FOR ACTION <br />'rQ ITEM I~IUMBER <br />Ma or and Ci Council 8.2 <br />AGENDA SECTION MEETING DATE PREPARED BY <br />General Business anu 17, 2012 Tim Simon, Finance Director <br />ITEM DESCRIPTION REVIEWED BY <br />Resolution Providing for the Sale of G.O. Improvement Cal Portner, Ci Administrator <br />Refunding Bonds, Series 2012B to Refund Existing G.O. Bonds, REVIEWED BY <br />Series 2007C for Interest Cost Savings <br />ACTION REQUESTED <br />The City Council is asked to adopt a resolution providing for the sale of $1,515,000 General Obligation <br />Improvement Refunding Bonds, Series 2012B to refund existing General Obligation Bonds, Series 2007C <br />for interest cost savings. <br />BACKGROUND/DISCUSSION <br />After every tax settlement and bond payment, the finance department reviews the various debt service <br />funds and outstanding bond issues to determine if sufficient cash exists to pay-off any outstanding bonds <br />and look at the current market for interest rates for refinancing opportunities. <br />On June, 4 2007, the city issued $3,090,000 in General Obligation Improvement Bonds, Series 2007C. <br />The bonds were used for the Deerfield and Irving Street improvement project. The bonds are repaid with <br />special assessments and an annual tax levy. Our debt policy requires a present value savings of 3% on <br />crossover refunding bond issues and the latest estimates show a savings of approximately 4%. With the <br />issuance of the bonds for the public works project, we are able to combine the two bond issues and <br />greatly reduce our issuance fees. <br />The refunding bonds will be sold thru a competitive sale on February 21, 2012, and the results will be <br />presented to the Council that evening. <br />FINANCIAL IMPACT <br />Current interest rates are approximately 4% and the new estimated interest rates should be just under <br />1.6%. The savings will occur over the remaining five years at a present value of slightly less than $70,000. <br />We will be able to adjust our portion of the tax levy starting in 2012 for taxes payable 2013. The source <br />of repayment will not change from the prior bonds: special assessments and tax levy. <br />ATTACHMENTS <br />• Resolution Providing for the Sale of $1,515,000 General Obligation Improvement Refunding <br />Bonds, Series 2012B <br />Action Motion by Second by Vote <br />PBi1EREl1 RC <br />A~U <br />