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<br />. <br /> <br />. <br /> <br />. <br /> <br />~ <br />~~HILLS <br /> <br />MEMORANDUM <br /> <br />DATE: <br /> <br />October 5,2004 <br /> <br />Agenda Item 3,A <br /> <br />TO: Economic Development Authority <br /> <br />FROM: Murtuza Siddiqui, Finance Director/Treasurer 'W\S <br /> <br />SUBJECT: TIP Increment Refunding Bonds <br /> <br />BACKGROUND: <br /> <br />On September 13, 2004, the Council authorized Ehlers & Associates to solicit proposals for the <br />sale of$2,410,000 G,O, Tax Increment Refunding Bonds. This is refunding of the $3,100,000 in <br />General Obligation Tax Increment Bonds, Series 1998A, issued originally in 1998. The bonds <br />were issued for the purpose of financing for relocated 14th street improvements and Round Lake <br />Road/Highway 96 intersection improvements in Tax Increment District No.2. These bonds <br />carry an average interest cost of approximately 4.6%, With today's low interest rates, refunding <br />the existing bonds and replacing it with a lower interest bearing bonds, the City will realize a net <br />cost savings in excess of$130,000 in present value over the remaining life of the bonds. <br /> <br />DISCUSSION: <br />Ehlers & Associates solicited proposals for the sale of the bonds, On September 27, 2004, <br />Ehlers & Associates received proposals from six institutions and the bids were opened and a <br />tabulation of the proposals was presented to the City Council for their action, The lowest bid <br />was received from Piper Jaffray & Co. with a true interest cost of3.2192%. The Council <br />accepted the bid from Piper Jaffray & Co. and awarded the sale of$2,395,000 general obligation <br />Tax Increment Refunding Bonds, Series 2004A. <br /> <br />RECOMMENDED ACTION: <br /> <br />Staff recommends that the Economic Development Authority pledge the tax increment revenues <br />to the City for the principal and interest on the Tax Increment Refunding Bonds, series 2004A. <br />