2000-02 PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION REFUNDING BONDS

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L t` � t r � COUNCIL MEMORANDUM #00-02 February 4, 2000 TO: Honorable Mayor Howley and City Council Members FROM: Steve G , ity Manager Beth Cou r, irector of Financial Management �� � RE: Ordinance rovin the Sale of General Obli ation Refundin Bonds The City Council will be asked to approve the sale of the City's General Obligation Refunding Bonds, Series 2000. The proceeds of the Bonds will be used to refund the City's outstanding Unit Priced Demand Adjustable Water Revenue Bonds, Series 1985. The existing letter of credit on the 1985 Bonds is expiring and, through this refunding, the City will be able to redeem all outstanding 1985 Bonds at the lowest fixed interest rate currently available to the City in the market on the date of sale. The Bonds are scheduled for a competitive sale on February 15t". Final terms for the Bonds will be determined on that date. The City Council is asked to approve an ordinance with certain maximum principal amounts and interest rates. For example, the maximum amount of the Bonds in the ordinance is $30,660,000, even though the current estimate of the final amount of Bonds to be issued is closer to $29,060,000. The ordinance delegates to the City Manager and Directar of Financial Management, acting together, to confirm the final terms for the Bonds, as long as those terms are within the maximum levels set forth in the ordinance. The Bonds are expected to be sold with bond insurance, which will allow the City to achieve interest rate savings far in excess of the cost of the bond insurance. Bids were taken from all municipal bond insurers and the lowest bid was from Financial Guaranty Insurance Company, New York, New York. The upgrade of the City's general obligation bond rating from "A2"to "A1" has generated savings in the cost of the bond insurance and is expected to result in interest rate savings in the bids by underwriters for the Bonds. The Bonds are expected to close on February 24"�. On that date the proceeds of the Bonds will be available to the City to redeem all outstanding 1985 Bonds on such February 24th and pay the costs related to issuance of the Bonds. Daniel Forbes from Speer Financial, Inc., the City's bond financial advisor,will be at the meeting to answer any questions you may have on this matter.