2009-70 PROVIDING FOR THE PREPAYMENT OF THE TAXABLE GENERAL OBLIGATION NOTES

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FINANCIAL MANAGEMENT DEPARTMENT #2009- 50 DATE: October 1, 2009 TO: Honorable Mayor Michael T McElroy and City Council FROM: Ryan P. McCrady, City Manager ' Ron E. Neufeld, Finance Director SUBJECT: Ordinance Providing for Prepayment of 2007 General Obligation Notes SUMMARY RECOMMENDATION: Staff recommends that the City Council approve the attached ordinance, which authorizes the prepayment of the Taxable General Obligation Notes, Series 2007, of the City of Decatur and approves the form of the Letter of Instructions to the paying agent for said Notes. BACKGROUND: On August 15, 2007, the City Council authorized the purchase of the Decatur Conference Center and Hotel. In order to finance the purchase of the hotel, the City of Decatur issued $7,250,000 of General Obligation Notes, which were financed over three years with interest only payments. The bond issue was structured, so that the General Obligation Notes could be called in two years. The earliest call date was 12/15/2009. In November, 2007 the hotel was sold to Lakeview Hospitality, LLC and the money was invested by the City until the notes could be called. Because the City was able to invest the money at a higher than expected rate, the notes will be called and the remaining investment income of approximately $27,500 will be transferred to the General Fund. POTENTIAL OBJECTION: There are no known objections to this resolution. INPUT FROM OTHER SOURCES: None STAFF REFERENCES: Ron Neufeld, Finance Director- 424-2702 The Finance Director, Ron Neufeld will be in attendance at the City Council meeting to answer any questions of the City Council on this item. BUDGET/TIME IMPLICATIONS: None