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MEMORANDUM <br /> <br />Item # '5.3.* <br /> <br />TO: <br /> <br />Mayor and City Council <br /> <br />FROM: <br /> <br />Lori Johnson, Finance Director <br /> <br />DATE: <br /> <br />December 22, 2003 <br /> <br />SUBJECT: <br /> <br />Consider Resolution Calling for Redemption of Outstanding General <br />Obligation Sewer Revenue Bonds, Series 1994B, Dated June I, 1994 <br />and General Obligation Tax Increment Bonds, Series 1994D, Dated <br />July I, 1994 <br /> <br />The attached resolution calls for the prepayment of sewer revenue and library tax increment bonds. <br />Whenever possible, bonds are either re£manced or called (prepaid) to save interest costs or to <br />restructure debt to better fit cash flows or upcoming bonding needs. These issues are being called <br />because there is sufficient cash in their respective funds allowing for a savings in interest expense. <br /> <br />There is currently $660,000 outstanding on the 1994B Sewer Revenue bonds that have a scheduled <br />maturity of February 1, 2009. The interest rates on this issue range from 5.4 to 5.8 percent. There is <br />adequate cash available in the sewer fund to prepay this issue and still leave enough for any <br />emergency repairs or capital outlay items that may be needed. The upcoming improvements <br />including the digester cover and head works will most likely be bonded but at a lower interest rate <br />than this existing debt. The interest savings by calling the 1994B bond is $99,880, excluding interest <br />earnings on the cash that would be used to make these payments through maturity in 2009. <br /> <br />The series 1994D Tax Increment bonds funded a portion of the library expansion. There is currently <br />$105,000 remaining on this issue that has a f'mal maturity of February 1, 2007. Because landfill <br />surcharge revenues have come in much higher than anticipated and additional tax increment funds <br />were available, there is enough cash in the library fund to prepay this issue. There will still be funds <br />available in the hbrary fund if an opportunity to purchase additional land for future expansion <br />presents itself. The interest savings by calling this issue is $9,552.50, excluding any interest that <br />would have been earned on the cash until maturity in 2007. <br /> <br />Action Requested <br />City Council is asked to consider the attached resolution calling for the redemption of outstanding <br />General Obligation Sewer Revenue Bonds, Series 1994B, dated June 1, 1994 and General Obligation <br />Tax Increment Bonds, Series 1994D, dated July 1, 1994. <br />S:~Council~Lori~2003~ sewerandtaxincrerncntbonds.doc <br /> <br /> <br />