TO: Mayor and Members of City Council
THRU: Telly C. Whitfield, Ph.D. - Assistant City Manager
FROM: Jay C. Toland, CMA - Chief Financial Officer
DATE: 3/18/2019
RE:
Title
Refunding the outstanding maturities of General Obligation Public Improvement Bonds, Series 2005 maturing June 1, 2020 through June 1, 2025
Adopt Preliminary Resolution / Bond Order (Refunding); File Sworn Statement of Debt / Statement of Estimated Interest
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal V: Sustainable Organizational Capacity - Objective A: To ensure strong financial management with fiduciary accountability and plan for the future resource sustainability by aligning resources with City priorities.
Executive Summary:
The City plans to issue the first of three issuances of Parks and Recreation General Obligation Bonds in May of 2019. With this first issuance is an opportunity to refund (refinance) General Obligation Public Improvement Bonds, Series 2005 to realize lower interest cost. Below are the cash flow savings:
2019 - $290
2020 - $24,998
2021 - $25,288
2022 - $28,663
2023 - $25,313
2024 - $27,000
2025 - $28,688
Total - $160,238
Net Present Value - $145,103
Background:
Analysis of current market rates indicates that the City is able to realize debt service savings by refunding the outstanding maturities of its General Obligation Public Improvement Bonds, Series 2005 maturing June 1, 2020 through June 1, 2025, inclusive. A copy of a refunding analysis is attached. As provided in that analysis, based on an estimated interest rate, the City would be able to realize net present value savings of $145,103 or 5.80% of the refunded per amount.
First Tryon Advisors is serving as Financial Advisor to the City. Womble Bond Dickinson (US) LLP and The Charleston Group are serving as Co-Bond Counsel. The City is planning on selling the General Obligation Refunding Bonds, Series 2019 in the public market in conjunction with a series of new money General Obligation Bonds. The City is scheduled to sell Bonds on May 7, 2019.
Issues/Analysis:
Cash flow savings analysis with refunding
2019 - $290
2020 - $24,998
2021 - $25,288
2022 - $28,663
2023 - $25,313
2024 - $27,000
2025 - $28,688
Total - $160,238
Net Present Value - $145,103
Budget Impact:
Positive - refunding lowers the amount debt service owed from General Obligation Public Improvement Bonds, Series 2005.
Options:
Adopt Preliminary Resolution / Bond Order (Refunding); File Sworn Statement of Debt / Statement of Estimated Interest - General Obligation Public Improvement Bonds, Series 2005
Do not Adopt Preliminary Resolution / Bond Order (Refunding); File Sworn Statement of Debt / Statement of Estimated Interest - General Obligation Public Improvement Bonds, Series 2005 and provide guidance to staff
Recommended Action:
Staff recommends the adoption of Preliminary Resolution / Bond Order (Refunding); File Sworn Statement of Debt / Statement of Estimated Interest - General Obligation Public Improvement Bonds, Series 2005
Attachments:
Form of Notice - Bond Order (Refunding)
Statement of Interest - Refunding
Statement of Debt - Refunding
Preliminary Resolution and Order - Refunding
Refunding Analysis