3.5 EDSR 11-13-2012 - Laserfiche WebLink

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ht ik REQUEST FOR ACTION River To Item Number Economic Development Authority 3.5 Agenda Section Meeting Date Prepared by Consent November 13, 2012 Tim Simon, Finance Director Item Description Reviewed by Consider resolution calling for a public hearing to refinance the EDA General Obligation 2007 bonds Reviewed by Action Requested A resolution calling for a public hearing on the issuance of General Obligation Refunding Bonds and authorizing the publication of a notice of hearing. Background/Discussion The purpose of calling for a public hearing on December 10th is to consider refunding the General Obligation Bonds, Series 2007 that were issued by the EDA for the YMCA project for an interest savings. The 2007 bonds were issued in the amount of$10,000,000 and have a final maturity of February 1, 2033. The true interest cost of the original bonds is 4.1780%. We are not considering the 2008 bonds that were issued since no call date exists on those shorter term bonds. Under the lease agreement, the EDA levies an amount for two-thirds of annual principal and interest and the YMCA pays the remaining one-third. Per our debt policy"advance refunding bonds shall not be utilized unless present value savings of 4%to 5%of refunded principal is achieved and unless the call date is within 4 years. The state law minimum is 3%of refunded principal. Bonds shall not be advance refunded if there is a reasonable chance that revenues will be sufficient to pre-pay the debt at the call date." Financial Impact Ehlers will be at the December 10 meeting to review the current interest rate environment and the estimated savings. Attachments • Resolution calling for a public hearing on the issuance of General Obligation Refunding Bonds and authorizing the publication of a notice of hearing. Action Motion by Second by Vote Follow Up C:A Users\dhucbncr\Appllata\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\X3O71NQV\YMCArefundingbonds.doc