19-Deliberate and possibly act on certificates of obligation and refunding bond issuesCITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date:
Originating Depattment:
Presented By:
Agenda Item No.:
11/03/09
Council Date:
Finance
Gene Anderson
19.
11 /09/09
RECOMMENDED MOTION:
Direct staff to begin the refunding process for current debt issues and the proposed issuance of
certificates of obligation.
POLICY ISSUE(S):
Fiscal management.
Dan Almon, the City's financial advisor from Southwest Securities, previously discussed the
possibilities and timing of refunding current debt issues for savings. His discussion included the
sensitivity of potential savings to interest rate fluctuations. He also discussed the proposed issuance of
certificates of obligation for the expansion of Collegiate Drive and the timing of that issue.
As noted in the Southwest Securities refunding analysis, there is the potential for savings of
approximately $575,015 on the GO issues and $864,907 for the waterworks and sewer system issues.
As shown on the accompanying principal and interest payment comparisons, the proposed refunding
also does not extend the payment period, i.e. it does not take existing debt and spread its payment out
over a longer time. The refunding merely takes advantage of lowering the "R" variable in the basic
equation of (Principal x Rate)/Time to lower our payments.
The Council needs to give direction to the staff on (1) refunding the current debt issues for savings and
(2) the date to proceed on the process to issue new certificates of obligation for the Collegiate Drive
Project.
BOARD/COMMISSION RECOMMENDATION:
NONE
EXHIBITS:
Description of bonds included in refunding; P& I Payment Comparison - WW & SS Issues; P& I
Payment Com arison - GO Issues
ACTION:
BUDGET INFO:
❑ Financial Report ~ Minute Order
Expense
$NA
❑ Department Report ❑ Resolution
Budgeted Amt.
$NA
❑ Presentation ❑ Ordinance
y'I'D Actual
$NA
❑ Public Hearing ❑ Other
Acct. Name
NA
Acct. Number
NA
FISCAL NOTES:
None
REVIEWED AND APPROVED BY:
Z Administration Z Ciry Cletk ❑ Community Development ❑ EMS/IT Z Finance ❑ Fire
❑ Municipal Court ❑ Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities
City of Paris
Revised 2/04/08
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Bonds Included in the Proposed Refunding Issue
The following is a listing of our outstanding eight bonds, including the original amount, the
remaining principal balance, and what they were issued for.
• Waterworks & Sewer System Revenue Bonds-Series 1997
$5,000,000 original issue and $2,525,000 outstanding. Proceeds from the bond sale were
to be used for the purpose of paying for improvements and extensions to the City's water
and sewer system plus the cost of issuance.
• Waterworks & Sewer System Revenue Refunding Bonds-Series 1998
$6,905,000 original issue and $2,430,000 outstanding. Proceeds from the bond sale were
to be used for the partial refunding of the Waterworks & Sewer System Bonds-Series
1992 for savings plus the cost of issuance.
• Tax & Revenue Refunding Bonds-Series 1998
$5,810,000 original issue and $2,035,000 outstanding. Proceeds from the bond sale were
to be used for partial refunding of the Tax & Revenue Refunding Bonds-Series 1991 far
savings plus the cost of issuance.
• Waterworks & Sewer System Revenue Bonds-Series 2000
$9,500,000 original issue and $7,045,000 outstanding. Proceeds from the bond sale were
to be used to clean, repair, and replace water and sewer lines, plus pay for professional
services and issuance costs.
• Combination Tax & Revenue Certificates of Obligation-Series 2000
$6,000,000 original issue and $4,175,000 outstanding. Proceeds from the sale were to be
used for streets, drainage, repair or purchase buildings including City Hall and Fire
Station, improve & equip city parks, plus pay for professional services and issuance
costs.
• Tax & Revenue Refunding Bonds-Series 2001
$5,130,000 original issue and $1,745,000 outstanding. Proceeds from the sale were used
to partially refund the City's Tax & Revenue Refunding Bond-Series 1991 for savings
and pay issuance costs.
• Combination Tax & Revenue Certificates of Obligation-Series 2002
$6,060,000 original issue and $4,535,000 outstanding. Proceeds from the sale were used
to purchase, renovate an existing building for the police and courts functions, pay
professional services, and pay issuance costs.
• General Obligation Refunding Bonds-Series 2003
$7,130,000 original issue and $4,105,000 outstanding. Proceeds from the sale were used
to refund the Certificates of Obligations-Series 1993 and partially refund the Certificates
of Obligation-Series 1994 plus pay the cost of issuance.
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