Title
Resolution Providing for Certain Modifications to the City's Outstanding Not to Exceed $85,000,000 Combined Enterprise System Revenue Bond Anticipation Note, Series 2020
Body
Council Priority: Maintain Infrastructure and Provide Sustainable Growth Opportunities
Department: Water Resources
Council District: All
Public Hearing: N/A
Advertising Date/By: N/A
Contact 1 and Phone: Richard L. Lusk, 373-2077
Contact 2 and Phone: Michael Borchers, 373-2494
PURPOSE:
To consider a resolution amending the City's outstanding not to exceed $85,000,000 Combined Enterprise System Revenue Bond Anticipation Note, Series 2020, with PNC Bank, refinancing it to a lower interest rate, eliminating certain fees and providing for an additional 12 month term if needed.
BACKGROUND:
On June 30, 2020 the City issued an $85,000,000 Combined Enterprise System Revenue Bond Anticipation Note, Series 2020, to finance various improvements to the City's water and wastewater treatment systems. Only interest is paid during the 24-month term of the Note. In June interest rates and related fees were higher than normal due to financial market volatility during the early months of the pandemic. We expected rates and fees to return to a lower range within 6-9 months and are recommending that we refinance the Note at this time, lowering the interest rate from 2.39% to 0.79%, along with the elimination of related fees, and provide for an additional 12-month term extension if needed.
BUDGET IMPACT:
Refinancing of the outstanding $85,000,000 Combined Enterprise System Revenue Bond Anticipation Note, Series 2020, will result in a savings in excess of $1 million in interest costs and eliminated fees over the next 18 months that the Note is outstanding prior to converting the Note to long-term bonds on or about June 30, 2022.
RECOMMENDATION / ACTION REQUESTED:
The Water Resources and Finance Departments recommend that City Council approve the attached resolution providing for certain modif...
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