CC PACKET 11271990 - Laserfiche WebLink

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M E M O R A N D U M DATE: November 20, 1990 TO: Thomas D. Burt, City Manager FROM: Roger Larson, Finance Director ITEM: RESTRUCTURE OF 1985 DEBT In 1985, the City of St. Anthony sold $2, 125, 000 of General Obligation Tax Increment Bonds- to fund a.- redevelopment- project undertaken by the Housing and Redevelopment Authority. The proceeds of the bonds were used to provide funds for the Kennzie Terrace Redevelopment Project. This money was used to acquire .land, pay for certain public improvements and pay the costs of the H.R.A. incurred in connection with a redevelopment plan. These bonds have a call-in feature (February 1, 1991) . St. Anthony can now call-in these bonds and restructure this debt at a lower interest rate. (The net interest rate on the original issue is • 7 . 65% and current interest rates are averaging 6. 270) . At the October 2, 1990 work session, Council directed staff to look for stability in interest rates and advise Council of the proper time to restructure this debt. Since then, interest rates were closely monitored and the criteria of $35, 000 savings for 30 days now has been met. The current analysis, prepared by Springsted, Inc. , indicates a cost savings of $ 38, 914 for rebonding. Their advice is to restructure the 194 through 198 debt and leave the current 192 and 193 debt in tack. The City will avoid paying the call in premium in the two years in which there is no cost savings in rebonding. Overview 1) $35, 000 savings for 30 days now exists. 2) Restructuring of 194 through 198 debt. 3) Current savings of rebonding = $38,913 4) Cash outlay = $ 0. 00 dollars. The payment of $ 150, 950 has to be made whether or not St. Anthony rebonds this debt. 5) Reduces the City's total debt.