Placement: New Business
Action Requested: Discussion
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Discuss Authorizing the Refunding of the Utility System Refunding Revenue Bonds, Series 2012.
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Submitted By: Stephen Okiye, Interim Finance Director, Financial Management Department
Strategic Plan Link: The City’s Mission to be financially responsible.
Executive Summary (General Business): Staff is recommending the refunding of the Utility System Refunding Revenue Bonds, Series 2012 to strengthen our financial position and improve our bond ratings.
Presentation Information: A presentation will be provided on the first reading of the ordinance.
Staff Recommendation: Request that the Council authorize the Refunding of the Utility System Refunding Revenue Bonds, Series 2012.
Background: The Utility System Refunding Revenue Bonds, Series 2012 were issued in July 2012 with a principal amount of $21,375,000. They were issued to refund a portion of the City’s Utility System Revenue Bonds, Series 2003. There is a current outstanding balance of $16,275,000 maturing in 2029. The City’s Debt Management Policy allows current refunding when net present value savings equal or exceed 3 percent of the refunded bonds’ par amount.
Issues/Analysis: N/A
Financial Information: Refunding the Utility System Refunding Revenue Bonds, Series 2012 principal of approximately $16 million could result in $1.5 million of NPV debt service savings. This equates to an annual savings of approximately $230,000 through 2029 or 9.5% of the refunded bonds par amount. This refunding will also allow the City to strengthen our position on our revenue pledge.
Special Consideration: N/A
Location of Project: N/A
Attachments:
1. Refunding Opportunity Memo
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: N/A
Legal Sufficiency Review:
N/A