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ITEM # 5. <br />~~~~ <br />~•- <br />iver <br />MEMORANDUM <br />TO: Economic Development Authority <br />FROM: Tim Simon, Finance Director <br />DATE: October 2, 2007 <br />SUBJECT: Upcoming bond pre-sale report review <br />Action Requested <br />Call special Economic Development Authority meeting for October 15, 2007 at 6:30 p.m. to <br />award the sale of the bonds. <br />Background/Discussion <br />Bonds are being issued to finance the 55,000 s.f. recreational facility to be leased to the <br />YMCA. The Economic Development Authority (EDA) will be issuing the bonds due to the <br />legal authority necessary to utilize bond proceeds for a recreational facility leased to a non- <br />profit. If the EDA issues over $10,000,000 in a calendar year, the bonds will not be bank <br />qualified which means they carry a higher interest rate and will be taxable bonds. The spread <br />in today's market between bank qualified and non-bank qualified bonds is between .2% and <br />.25%. As a result, the EDA will be issuing $10,000,000 in calendar year 2007 and $2,000,000 <br />in calendar year 2008, which will result in an estimated debt service savings of approximately <br />$280,000 in present value dollars. <br />Next Steps <br />October 15, 2007 -Public Hearing and the City Council and EDA will issue the bonds <br />Financial Impact <br />$10,000,000 will be issued in 2007 and $2,000,000 will be issued early in 2008 for a total <br />bond issue of $12,000,000. <br />Attachments <br />Pre-sale report <br />