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Department Approval �� ,�: �� Item Description l�'�, Jy REQUEST FOR COUNCIL ACTION Date: 06/08/09 Item No.: 12.e City Manager Approval � / Establish a Date of Sale for the Issuance of the City's 2009 Refunding Sonds BACKGROUND Sack in 1999, the City issued the last of its Street Construction Sonds used to finance local street improvements. Since then, the City has relied solely on MSA monies and interest earnings from the City's Street Infrastructure Replacement Fund for this purpose. The 1999 Sonds are scheduled to be retired in 2014. However, given current market conditions the City can financially benefit by refinancing those bonds at today's lower interest rates. The mechanism to achieve this involves the issuance of `refunding' bonds — whereby the City's issues new bonds to pay off the remaining principle on the old bonds. T� levies earmarked for the old bonds are then redirected to pay the new bonds. Sased on current projections, the refinancing is expected to generate present value savings in the amount of $22,800 over the next 5 years. This will allow the City to lower its debt service levy by $3,800 annually. While the savings is relatively small, it nonetheless is advantageous given the fact that the City is preparing to go to the bond market anyway with the issuance of the Westwood Village I Housing Revenue Sonds. Sy combining these bond financings, the City will save thousands of dollars of issuance costs when compared to issuing the bonds separately. POLICY OBJECTIVE The City's Council-adopted Debt Service Policy encourages the City to refinance outstanding debt whenever it is financially beneficial. FINANCIAL IMPACTS As noted above, the City can expect to realize present value savings in the amount of $22,800 over the next 5 years. STAFF RECOMMENDATION Staff recommends the Council approve the attached resolution setting the date of sale for the issuance of the City's 2009 Refunding Sonds.