Title
Consider/Discuss/Act on a Resolution Approving and Authorizing the Redemption of Certain Outstanding Certificates of Obligation, Series 2001A and General Obligation Bonds, Series 2001
Summary
COUNCIL GOAL: Revenue Projections for Budget Considerations
MEETING DATE: March 2, 2010
DEPARTMENT: Finance
CONTACT: Jennifer Fung, Executive Director of Finance
RECOMMENDED CITY COUNCIL ACTION: Approval of Resolution
ITEM SUMMARY:
• The City has the option to redeem in whole or in part the Certificates of Obligation Bonds known as City of McKinney, Texas, Combination Tax and Golf Course Revenue Certificates of Obligation, Series 2001A dated October 15, 2001, maturing on August 15 in years 2014, and aggregating in principal amount of $255,000.
• The City also has the option to redeem in whole or in part the General Obligation Bonds, Series 2001 dated October 15, 2001, maturing on August 15 in years 2014, 2015, and 2016, and aggregating in principal amount of $1,180,000.
• Redeeming bonds is similar to paying off loans early.
• The interest rate on the certificate of obligations is at 4.5% and the interest rates for the general obligation bonds ranges from 4.4% to 4.6% per annum.
• All arrangements necessary to notify the holders of such obligations of the decision to redeem will be directed in accordance with the redemption provisions.
• With the redemption, the City will be able to keep the I&S portion of the property tax rate at $0.179 as indicated on the truth-in-taxation calculation and an interest saving of $113,705.
• Funding for redemption is budgeted in the Debt Service Fund.
BACKGROUND INFORMATION:
• The 2001A Certificates of Obligation and the 2001 General Obligation Bonds were issued, sold and delivered subject to the right and authority of the City to redeem them prior to maturity.
FINANCIAL SUMMARY: Savings of $113,705 in interest payment.
BOARD OR COMMISSION RECOMMENDATION:• N/A