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r TiLKHETWIfi <br />NOV 1 1 1995 <br />CITY Of ORONOREQUEST FOR COUNCIL ACTION <br />DATE: November 8, 1995 <br />ITEM NO: <3^^ <br />De|»rtnieiit Approval: <br />NaoM Ron Moorse <br />Title City Administrator <br />ator Reviewed:Agenda Section: <br />Item Description: / <br />Refunding of 1989 and 1985 Bonds - Call for Bond Sale <br />Attachments; 1.) Resolution Providing for a Bond Sale <br />2.) Letter from Carolyn Drude of Ehlers and Associates and Attachments <br />The city has two bond issues that have reached, or will soon reach, their call dates. The call <br />date is the point at which the city has an opportunity to refund those issues at a lower interest <br />rate. The two issues are die 1985 Crystal Bay sewer bonds and the 1989 Highway 12 sewer and <br />water bonds. The 1985 bonds have $360,000 of principal remaining at interest rates of 8% to <br />S.25%. The 1989 bonds have $1 ,550,000 of principal remaining at interest rates of 6.25to <br />6.60%. <br />Staff has worked with Carolyn Drude of Ehlers Associates, the city's bond consultant, to <br />detennine the net savings to the city of calling both issues in 1996 through a refunding bond sale <br />in December of 1995. The refunding will enable the city to replace bonds with interest rates <br />of 6-8% with bonds with interest rates of under 5%. The maturity schedule of the bonds will <br />not be changed. The new bonds will be retired within the same time frame as the existing <br />bonds. <br />The actual cash savings, net of all issuance costs, over the six years of the bonds will be <br />$120,310. This translates to a reduction ot approximately $20,000 per year in the tax levy <br />required to fund the debt service. The present value of the tota*. savings is $100,801. <br />Calling for a Bond Sale <br />If the Council decides to move ahead with the refunding, the Council needs to call for a bond <br />sale on December 11, 1995. The resolution calling for the bond sale is attached for Council <br />adoption. <br />Staff Recommendation . . , r- r <br />It is staffs recommendation that the 1985 and 1989 bonds be refunded to obtam the benefit of <br />the savings due to lower interest rates. <br />COUNCIL ACTION REQUESTED: <br />Motion to adopt a resolution calling for a bond sale on December 11, 1995