Laserfiche WebLink
<br /> <br />At this time, it is estimated that the annual savings from refinancing the Series 2002 bonds is about <br />$50,000 and from the Series 2008 is about $40,000 per year, for a total of about $860,000 over the <br />remaining life of the debt. The Series 2004 Bonds are not financially advantageous to refinance at this <br />time, but are included in this authorization so that they may be refinanced if conditions are favorable in <br />the future. Interest rates fluctuate, and the actual savings could be more or less than this amount, <br />depending on market conditions at the time of the sale. It is also possible that interest rates could rise <br />sufficiently as to make the refunding not financially feasible. In that case, the City would not issue the <br />bonds. <br /> <br /> <br />RELATED CITY POLICIES <br />The City’s debt policies set out provisions for refunding debt. Those policies state that the City will <br />issue advance refunding bonds when advantageous, legally permissible, prudent, and when the net <br />present value savings is a minimum of three percent of the refunding par amount, as required by state <br />law. Additionally, those policies set out that the City should issue current refunding bonds when the <br />net present value savings exceed $100,000. Under current market conditions, the anticipated savings <br />from this proposed refinancing far exceed the minimum threshold in the City’s debt policy. <br /> <br /> <br />COUNCIL OPTIONS <br />The council can either adopt the resolution or not adopt the resolution. If the resolution is not adopted, <br />the City will not issue refunding bonds to take advantage of the current low interest rate environment <br />and save money on future debt service payments. <br /> <br /> <br />CITY MANAGER’S RECOMMENDATION <br />The City Manager recommends adoption of the resolution. <br /> <br /> <br />SUGGESTED MOTION <br /> <br />Move to adopt Resolution 5042, authorizing the sale of General Obligation Refunding Bonds. <br /> <br /> <br />ATTACHMENT <br /> <br />A. Proposed Resolution <br /> <br /> <br />FOR MORE INFORMATION <br /> <br />Staff Contact: Twylla Miller <br />Telephone: 541-682-8417 <br />Staff e-mail: twylla.j.miller@ci.eugene.or.us <br /> <br /> <br /> <br /> <br /> S:\CMO\2011 Council Agendas\M110926\S1109262B.doc <br />