HomeMy WebLinkAboutA003 - Memo to City Council dated March 12, 1993 - Refinancing of 1978 Electric Revenue Bonds J
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TO: Mayor and Members of City Council
FROM: Steven L. Schainker, City Manager y �
DATE: March 12, 1993
SUBJECT: Refinancing of 1978 Electric Revenue Bonds
Dave Dirks from our financial consultants Evensen Dodge Inc. contacted me
recently regarding the possibility of the City refinancing a 1978 Electric
Revenue Bond issue. In the face of ever declining interest rates our
consultants have been continuously reviewing outstanding bond issues to see if
we can take advantage of the financial markets. In the past the refinancing of
this particular issue was prohibitive because of a 2% "penalty" for any bonds
which were refinanced. It appears that the market is so good at this time that
we would still be able to realize significant savings even with this redemption
premium of 2% of par.
Attached for your review is a pre-sale analysis for refunding our Electric
Revenue Bond issue. According to the information provided on page five of
this report the City could save approximately $1,300,000 if we were to refinance
this issue under current market rates.
Dave Dirks will be here on Tuesday night to explain his analysis and
recommend a procedure which we utilized recently for our refunding of a G.O.
bond issue. This procedure will allow the staff to establish the actual sale date
so that we can move as swiftly as possible to take advantage of the changing
markets.
cc: Alice Carroll Direc
tor of Finance