2016-116 Council Resolution - Laserfiche WebLink

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STRUCTURING SUMMARY: SCHEDULES ATTACHED: RISKS/SPECIAL CONSIDERATIONS: SALE TERMS AND MARKETING: In consultation with the City, the 2016A Bonds have been structured over a term of ten years with approximately level annual payments of debt service. Schedules attached for the 2016A Bonds include sources and uses, debt service schedule based on the current interest rate environment and an aggregate debt service schedule for the City's existing and projected debt payable from the water fund. The outcome of this financing will rely on the market conditions at the time of the sale. Any projections included herein are estimates based on current market conditions. Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Bonds maturing on or after February 1, 2026 may be prepaid at a price of par plus accrued interest on or after February 1, 2025. Bank Qualification: The City does not expect to issue more than $10 million in tax-exempt obligations that count against the $10 million limit for this calendar year; therefore, the 2016A Bonds are designated as bank qualified. $1,980,000 Taxable General Obligation Improvement Refunding Bonds, Series 2016B Description of Issue PURPOSE: SERIES 2005A BONDS: Springs Proceeds of the 2016B Bonds will be used to refund the February 1, 2018 through 2021 maturities of the City's Taxable General Obligation Improvement Bonds, Series 2005A, dated November 1, 2005 (the "2005A Bonds"). The aggregate principal amount of the maturities being refunded is $1,935,000. This refunding transaction is being conducted as a current refunding in which the proceeds of the 2016B Bonds will be used within 90 days to redeem the 2005A Bonds and is being done to provide interest cost savings to the City. The Series 2005A Bonds were originally issued to finance various improvement projects related to the Legacy at Woods Edge development within the City. The 2005A Bonds were issued as taxable bonds as in the opinion of bond counsel, the City Charter provision applicable to the Legacy at Woods Edge area did not meet the requirements of Federal Tax Law. Federal regulations permit cities to issue tax exempt bonds secured by special assessments only if the assessment procedures meet certain criteria. One of those criteria is that owners of business and non -business property must be required to pay assessments on an equal basis. The City Charter provision that applies in this area permits owners of certain residential property to "opt out" of being assessed, which does not meet the "equal basis" requirement. Even if there are no residential properties that happen to be affected by the specific improvements financed by the proposed bond issue, the assessment procedure in this area remains questionable without a ruling on this point from the Internal Revenue Service. ed Page 4