01-27-2009 Council Work Session Packet

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� t;��-� ---- ------ - A1E1�'IORAl�'Dti M cc: Ro» Olson, Fina��ce Director TO: William Wells Orono City Administrator FROM: Carolyn Drude DATE: January 23, ?009 RE: Cun•ent refundin�of G.O. Improvement Bonds, Series l 999 and Series 2000 This will follow our meeting yesterday regarding the cunent refunding of the above two outstanding bond issues of the City: As we discussed, because interest rates on municipal bonds are quite favorable at this time, it Appears that the City may be able to save about $94,Q00 by issuing refunding bonds to lower the principal and interest payments. The interest rates on the existin�;bonds range from 4.7°�o to 5.3%, aiid currently comparable rates are about l.15°io to 2.35°ro for the 7 years remaining. The�94,000 savings,then, would be effective aver the 7 year period (Debt Service Camparison is attached.) This savings is net of all costs. We discussed a timetable oftakiii�competitive bids on the refunding bonds the moniing of February 23 for cons�deration by the Couz�cil at the 7:00 p.m. regular meeting. To acedmplish this, v�-e could�zzake avai]able a resolution calling the sale and a pre-sale report to Cauncil members for the regular meeting on �ebruary 9. If the market should change before bond bids are received, we will be in contact with tl�e City and be able ta postpone the sale. There would be no charge to the City unlessl refundin�bonds are actually sold and issued. We understand tl�e refunding may be discussed at the CounciI's January 27 work session. lf the Council ti�ishes to pmceed. please let us know and we will begin the bond sale process. Please call wit�i any questions that arise. www,ehlers-;rc.com EH L E RS Minnesota phone 651-697-8500 346Q Cenire Po�nte Drive �EADERS IN PUBUC F�NanCE Offices also in W�scons�n and Ilfuiois fax 65�-897-8555 Rosevilfe,MN 55113 1122