Item No:                    5M.

Meeting Date:           December 10, 2012

From:                          William Spinelli, Finance Director, CPA

Subject:                      Resolution designating the Finance Team to work with the City in Connection with the Issuance by the City of the not to exceed $16 million Electric System Refunding Bonds, Series 2013 to refund all or a portion of the City’s outstanding Electric System Revenue Bonds, Series 2004.

Staff Recommendation:

Staff recommends the City Commission approve Management to move forward with designating the Finance Team to work with the City in connection with the issuance by the City of the not to exceed $16 million Electric System Revenue Refunding Bonds, Series 2013; to refund all or a portion of the City’s outstanding Electric System Revenue Bonds, Series 2004, authorizing the City Manager to execute the engagement letters; authorizing the City Manager to retain other professional firms as needed.

Analysis:

Interest rates are very low in this current market, particularly on the short end of the yield curve.  Refunding the 2004 Electric System Revenue Bonds will allow us to take advantage of these rates that are lower than what is currently stated on the existing bonds.  Per the City’s existing Debt Management Policies and general GFOA national standards, the parameter that is of primary interest to the City is achieving net present savings of at least 3% of the par value of the refunded bonds.  If this level of savings cannot be achieved then the sale of the Electric System Revenue Refunding Bonds will not proceed.  Current estimated PV% savings are in excess of the minimum 3% threshold for all three Revenue Refunding Bonds. 

Options:

1.  Approve the Resolution designating the Finance Team; or

2.  Such alternative action as the Commission may deem appropriate

Fiscal Impact: 

Subject to the market, the 2013 Electric System Refunding Revenue Bonds are estimated to produce an average annual savings of $55,000-$70,000 per year to the Water, Wastewater and Gas Funds. 

Submission Date and Time:    12/6/2012 8:31 AM____

Department: ______________________ Prepared by:  ______________________                       Attachments:         Yes____   No ______ Advertised:   ____Not Required ______ Dates:   __________________________                      Attorney Review :       Yes___  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head ________ Finance  Dept. __________________                                    Deputy C.M. ___________________                                          Submitted by: City Manager ___________________

Account No. _________________ Project No. ___________________ WF No. ______________________ Budget  ______________________ Available _____________________