Title
Consider/Discuss/Act on an Ordinance Authorizing the Refunding of Certain Outstanding General Obligation Bonds, Series 2005 and Certificates of Obligations, Series 2005 and Delegation of Authority to Pricing Officer(s) to Sell and Deliver the Bonds
Summary
MEETING DATE: July 15, 2014
DEPARTMENT: Financial Services
CONTACT: Rodney Rhoades, Chief Financial Officer
RECOMMENDED CITY COUNCIL ACTION:
· Approval of Ordinance
ITEM SUMMARY:
· The City has the option to refund in whole or in part the General Obligation Bond, Series 2005, maturing in years 2016 to 2025, and aggregating in par amount of $9,970,000.
· The City also has the option to refund in whole or in part the Certificate of Obligation Bond, Series 2005 maturing in years 2016 to 2025 and aggregating in par amount of $11,115,000.
· Refunding bonds is similar to refinancing debt obligations to take advantage of lower interest rates.
· The current interest rate for the bonds ranges from 4.00% to 5.25% per annum.
· All arrangements necessary to notify the holders of such obligations of the decision to refund will be directed in accordance with the refunding provisions.
BACKGROUND INFORMATION:
· The 2005 General Obligation and the 2005 Certificates of Obligation Bonds were issued, sold and delivered subject to the right and authority of the City to refund them prior to maturity.
· Refundings were done in 2012 and 2013 to take advantage of historically low interest rates resulting in annual debt service savings of not less than $315,000 annually and a combined overall savings of $6,400,000.
FINANCIAL SUMMARY:
· Total debt savings of not less than $1,600,000, with an anticipated savings of over $1,900,000 depending on market conditions.
BOARD OR COMMISSION RECOMMENDATION: N/A