The URL can be used to link to this page

Home My WebLink AboutA002 - Council Action Form dated August 25, 1998 47 ITEM# DATE Au ust 25 1998 COUNCIL ACTION FORM SUBJECT: GENERAL OBLIGATION REFUNDING BONDS, SERIES 1992 BACKGROUND: The City's Financial Advisor, Evenson & Dodge have prepared a refunding analysis (attached) for the 1992 $6,010,000 General Obligation Bonds. The principal to be refunded is $3,255,000. A refunding at this time would result in a net present value savings to the City of $96,800 or 3.1% of par of the current issue. The annual savings range from $15,900 to $20,900. The analysis was prepared July 15, 1998 and assumes a sale date of September 1. The action requested of the City Council is to set the date of hearing to authorize the issue and further authorize the City Manager and the Finance Director to set the date of sale. This action shortens the time needed for the preparation of a bond issue and allows a quick response to favorable market conditions. The proposal to actually issue the refunding bonds will be presented to the City Council for approval. ALTERNATIVES: 1) Approve the resolution setting the date of hearing to authorize the issuance of General Obligation Refunding Bonds not to exceed $3,400,000 for September 8tn and granting the Finance Director and City Manager the authority to set the sale date for these bonds. 2) Deny the request to set a date of hearing. MANAGER'S RECOMMENDED ACTION: It is the recommendation of the City Manager that the City Council adopt Alternative 1, setting the date of hearing for September 8th to consider issuing up to $3,400,000 of General Obligation Refunding Bonds, and granting the Finance Director and City Manager authority to set the sale date for these bonds, if or when warranted. COUNCIL ACTION: w ATTACHMENT A CITY OF AMES, IOWA General Obligation Refunding Bonds, Series 1998 List of Assumptions 1. Dated date: September 1, 1998 2. Delivery date: September 1, 1998 3. First interest payment date: December 1, 1998 4. First maturity payment date: June 1, 1999 5. Last maturity payment date: June 1, 2004 6. Fiscal year end: June 30, 1997 7. The Refunding Bonds are exTected to be rated: S&P-"AA" /Moody's-"Aaa" 8. Bond insurance: Qualify Refunding Bonds for insurance 9. Issuance costs: S30,000 10. Underwriter's discount: $5.0051,000 11. Refunding Bonds'redemption date: Not subject to redemption 12. Equity contribution from the City: To be determined. 13. The S6,010,000 General Obligation Bonds, Series 1992 to be refunded are identified below: Maturities Included Redemption Redemption Par Amount From To Date Premium S3,125,000 2000 2004 6/1/99 PAR 14. Escrow account securities: To be determined t City of Ames, Iowa $3,255,000 G.O. Refunding Bonds, Series 1998 Uniform Savings 11 Market a 07/14/98 11 Scale = 6/23/98 Sale Sources and Uses of Funds Delivery Date:Y 9/ 1/98 Sources of funds Par Amount of Bonds................... $3,255,000.00 +Premium /-Discount................... $0.00 Bond Proceeds........................................... 3,255,000.00 ------------------- $3,255,000.00 Uses of Funds Deposit to Escrow Account............................... 3,207,935.49 Cost of Issuance........................................ 30,000.00 Underwriters Discount...................( 0.50000011)... 16,275.00 Contingency............................................. 789.51 ------------------- S3,255,000.00 Prepared by Evensen Dodge, Inc. Micro-Muni Sizing Date: 07-14-1998 a 13:54:05 Filename: AMES Key: REF City of Ames, Iowa $3,255,000 G.O. Refunding Bonds, Series 1998 Uniform Savings 11 Market a 07/14/98 11 Scale = 6/23/98 Sale Savings Report - - - - - - - - Proposed Debt Service - - - - - - - - Prior Cumulative Date Principal Coupon Interest Total Debt Service Savings Savings -------- -------------- ---------- -------------- -------------- -------------- -------------- -------------- 12/ 1/98 32,803.75 6/ 1/99 60,000.00 3.650000 65,607.50 158,411.25 179,375.00 20,963.75 20,963.75 12/ 1/99 64,512.50 6/ 1/ 0 655,000.00 3.900000 64,512.50 784,025.00 804,375.00 20,350.00 41,313.75 12/ 1/ 0 51,740.00 6/ 1/ 1 650,000.00 4.000000 51,740.00 753,480.00 769,375.00 15,895-00 57,208.75 12/ 1/ 1 38,740.00 6/ 1/ 2 640,000.00 4.050000 38,740.00 717,480.00 734,062.50 16,582.50 73,791.25 12/ 1/ 2 25,780.00 6/ 1/ 3 630,000.00 4.100000 25,780.00 681,560.00 698,125.00 16,565.00 90,356.25 12/ 1/ 3 12,865.00 6/ 1/ 4 620,000.00 4.150000 12,865.00 645,730.00 661,875.00 16,145.00 106,501.25 -------------- -------------- -------------- -------------- -------------- 3,255,000.00 485,686.25 3,740,686.25 3,847,187.50 106,501.25 ACCRUED 3,255,000.00 485,686.25 3,740,686.25 3,847,187.50 106,501.25 Dated 9/ 1/98 with Delivery of 9/ 1/98 Bond Years 11,936.250 Average Coupon 4.069002 Average Life 3.667051 N I C % 4.205351 % Using 99.5000000 T I C % 4.218719 % From Delivery Date Net Present Value Savings at: 4.0685% Equals 96,798.97 or 2.9739% of Par of the Current Issue or 3.0976% of Per of the Prior Issue Prepared by Evensen Dodge, Inc. Micro-Muni Debt Date: 07-14-1998 9 13:54:15 Filename: AMES Key: REF