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City Council Regular Meeting Minutes August 12, 2003 Page 2 VI. REPORTS FROM COMMISSIONS AND STAFF. None. 3 4 VII. GENERAL POLICY BUSINESS OF THE COUNCIL. 5 A. Ehlers and Associates will be present for the following: 6 1. Resolution 03-064, re: Provides for sale of$630,000 General Obli ag tion 7 Refunding Improvement Bonds, Series 2003D. 8 It was noted the City determined it was expedient to issue the City's $630,000 General 9 Obligation Refunding Improvement Bonds, Series 2003D, to achieve cost savings by refinancing 10 bonds eligible for refunding at lower interest rates in order to provide for the current refunding 11 of the outstanding portion of the City's $525,000 General Obligation Improvement Bonds of 12 1994B, $470,000 General Obligation Improvement Bonds of 1993A and $825,000 General 13 Obligation Improvement Bonds of 1995 (the "Refunded Bonds"). 14 15 City Manager Mornson introduced Mark Ruff, a financial advisor with Ehlers and Associates, 16 who noted the sale date for the bonds had been delayed from September 9, 2003, until September 17 23, 2003. He discussed the reasons for the delay of the sale. Mr. Ruff noted Council was 18 currently being asked to authorize the sale of the bonds and the actual sale was scheduled for 19 September 23, 2003. 20 21 Mr. Ruff explained Ehlers and Associates routinely reviewed outstanding bond issues to assess 22 the potential for cost savings. He noted cost savings could be achieved by refunding the stated issues. He added this issue met criteria set by both Ehlers and State and Federal regulations for the refunding of existing debt. Mr. Ruff stated the City's interest rate would hopefully be 25 reduced by at least 2%to 2!/2%. 26 27 Mr. Ruff noted a number of factors, including world events and economic conditions in general, 28 could impact rates prior to the sale date. He stated Ehlers would review market conditions prior 29 to the sale and would advise the City if it appeared minimum savings would be achieved, at 30 which time Ehlers would recommend the sale be delayed or cancelled. 31 32 Mr. Ruff stated the Series 2003D Bonds were projected to achieve a net current value savings of 33 about 5.6% or$50,000 over the life of the issue, given current interest rates. He indicated this 34 estimated savings did not reflect the benefit of"pre-paying" bonds with cash received from 35 advanced payment of assessments. Mr. Ruff noted prepaid special assessments had been 36 received, which would be used to pay down some of the bond debt service still due. 37 38 Mr. Ruff indicated a revised debt levy reflecting the remaining assessment and the new rates was 39 expected to reflect reduced impact on taxpayers. 40 41 2. Resolution 03-065 re: Provides for sale of$1,175,000 Advanced Refunding 42 Taxable General Obligation Tax Increment Bonds, Series 2003E. 43 It was noted the City determined it was expedient to issue the City's $1,175,000 Advanced 44 Refunding Taxable General Obligation Tax Increment Bonds, Series 2003E, in order to provide 46 advance refunding of the City's $1,720,000 Taxable Tax Increment Bonds of 1996.