2015.11.10 CC and WS Combined - Laserfiche WebLink

Home Browse Search

jv A enda Section: Consent Re ort Date November 5, 2015 �i�PON Council Meeting Date November 10, 2015 the city that woks for you REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: CONSIDERATION OF A RESOLUTION AUTHORIZING THE SALE OF REFUNDING BONDS, SERIES 2016A SUBJECT TO CERTAIN PARAMETERS; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY DEPARTMENT HEAD'S APPROVAL: CITY MANAGER'S APPROVAL: No comments to supplement this report Comments attached Recommendation: To adopt a Resolution Authorizing the Sale of Refunding Bonds, Series 2016A Subject to Certain Parameters; Fixing Their Form and Specifications; Directing Their Execution and Delivery; Providing for Their Payment; for the Escrowing and Investment of the Proceeds Thereof; and Providing for the Redemption of Bonds Refunded Thereby Purpose: This Resolution establishes a Pricing Committee consisting of the Mayor, City Manager and Finance Director to authorize and accept offers for the purchase of the Bonds and to negotiate the final terms of sale within the following parameters set forth and approved by the Council; (a) The proposal must produce debt service savings such that the present value of the debt service on the Bonds (computed to their stated maturity dates) is lower by at least 5% than the present value of the debt service on the Refunded Bonds. (b) The principal amount of the Bonds shall not exceed $9,005,000. (c) The final maturity of the Bonds shall be no later than the maturity date of the Refunded Bonds. Financial Impact: The same revenue stream from TIF Districts #31 and #32 will be used to repay the 2016A Bonds. The 2007B Bonds have interest rates averaging about 4.25%. Based on an estimated new rate of 2.8% the savings as a result of the refunding will be approximately $80,000 per year, after all fees and expenses. This savings expressed in present value terms is more than $1.25 million, or over 7% of the refunded principal. The minimum savings required by Minnesota state law for an advance refunding is a present value savings of 3.00%. Advance refundings are very sensitive to small changes in rates. The remaining $5,000,000 of principal of the 2007B bonds can be paid with cash after the 2017 call date or could be refinanced at that time.