Title
Order Authorizing $57,000,000 General Obligation Refunding Bonds
Body
Council Priority: Ensure Fiscal Stewardship, Transparency, & Accountability
Department: Finance and Legal
Council District: All
Public Hearing: n/a
Advertising Date/By: n/a
Contact 1 and Phone: Richard Lusk, 373-2077
Contact 2 and Phone: Charles Watts, 373-2320
PURPOSE:
In February 2020, the City proposes to sell up to $57 million General Obligation (GO) Refunding Bonds to refinance bonds issued in 1998, 2003, 2006, 2008 and 2010 for various general governmental capital projects, to achieve lower interest rates on the bonds. Estimated savings from refinancing these bonds is $1.7 million spread over the next 10 years. Issuance of the GO bonds requires City Council approval of the attached resolution and refunding bond order on December 17, 2019. The Local Government Commission will consider approving these bond refinancings on January 7, 2020. On January 21, 2020 the City Council will approve a bond sale resolution for the proposed refunding bonds of up to $57 million along with another bond sale resolution for $50 million of the bonds authorized in the 2016 GO Bond referedum.
BACKGROUND:
A portion of the GO Refunding Bonds issued will refinance the $20.43 million outstanding taxable fixed rate Build America Bonds listed below. Current short-term tax-exempt fixed interest rates (approximately 1.73%) are lower than the taxable interest rates on the outstanding bonds net of the federal interest rate subsidy received (net rate of approximately 3.15%), and thus, there is an estimated refinancing savings of $1.42 million spread over the next 10 years.
(i) $20.43 Million General Obligation Public Improvement Bonds, Series 2010B (fixed rate Federally Taxable Direct Subsidy Build America Bonds), dated November 2, 2010 and maturing October 1, 2030.
Another portion of the GO Refunding Bonds issued will refinance the $34.56 million outstanding variable rate bonds listed below. Curre...
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