TO:
Honorable Mayor Powell and Members of the City Council
THROUGH:
David N. Carmany, City Manager
FROM:
Bruce Moe, Finance Director
SUBJECT:Title
Refunding of Series 2004 Police & Fire Facility Project Certificates of Participation with an Estimated Present Value Savings of $1.8 million, and Approval of Bank of America Merrill Lynch as Underwriter and Stradling Yocca Carlson & Rauth as Bond and Disclosure Counsel
APPROVE
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Recommended Action
RECOMMENDATION:
The City Council Finance Subcommittee and City staff recommend that the City Council approve the debt refunding plan for the Series 2004 Police & Fire Facility Project Certificates of Participation (COPs). Further, staff recommends that the City Council approve Bank of America Merrill Lynch as Underwriter, and Stradling Yocca Carlson & Rauth as Bond and Disclosure Counsel, for this transaction.
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FISCAL IMPLICATIONS:
By taking advantage of the current interest rate environment, the City can achieve present value savings of approximately $1.8 million through refunding the existing Series 2004 Police & Fire Facility Project Certificates of Participation. The annual debt service payments for the Police/Fire COPs total approximately $810,000. If the refunding plan is approved, the overall debt service would be reduced by approximately $111,000 annually. The amortization period would no longer than the current term of 2036.
As an alternative, the City could opt to retain the existing debt service ($810,000) and shorten the amortization period by several years depending upon the interest rate achieved through the refunding. A final recommendation will be presented to the City Council when this item returns for final approval at the January 15, 2013 or February 5, 2013 City Council meeting.
BACKGROUND:
In line with the City Council Strategic Plan goals, staff reviewed the City’s outstanding debt for refunding (refinancing) oppor...
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