20 - General Olbigation Refunding Bonds, Series 2020

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Item No. 20 Memorandum TO: Mayor & City Council Grayson Path, City Manager FROM: Gene Anderson, Finance Director SUBJECT: GO REFUNDING BONDS, SERIES 2020 DATE: October 26, 2020 BACKGROUND: In 2010, the City of Paris issued $3,005,000 in certificates of obligation (COs) for improving and expanding South Collegiate Drive and making improvements to the frontage access for South Collegiate Drive. The COs had a maturity date of 2030 but could be redeemed after ten years. At the September 14th Council meeting, the City staff and the City's financial advisor (Samco Capital) were authorized to proceed with the ten year refunding opportunity as long as certain savings thresholds could be achieved. On October 5th a private placement memorandum was distributed to local, regional, and national banks inviting them to bid on the 2020 refunding bonds which under current market conditions should result in an interest expense savings to the City of approximately $172,950 over the life of the bonds. STATUS OF ISSUE: Bids will be received at noon on October 26th. At the Council's meeting on that same date, the City Council will consider those bids and authorize sale to the lowest bidder if that bid results in sufficient interest savings for the City. BUDGET: The estimated annual interest savings on the refunding bonds will be approximately $17,295 which over the ten year life of the bonds would generate savings of about $172,950. The actual amount cannot be calculated until the bids are received, but the City staff will provide the exact numbers at the meeting. OPTIONS: The Council may reject all bids or it may accept the bid which offers the lowest interest cost to the City. RECOMMENDATION: Move to adopt an ordinance authorizing the issuance and sale of the City of Paris, Texas General Obligation Refunding Bonds, Series 2020 and enacting other provisions related thereto.