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Department Approval <br />�� ,�: �� <br />Item Description <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Date: 07/20/09 <br />Item No.: 12.b <br />City Manager Approval <br />Award the Sale of the City's 2009 Refunding Sonds <br />� / <br />BACKGROUND <br />On June 8, 2009, the City Council established a date of sale for the issuance of the City's 2009 Refunding <br />Sonds. Sids on these bonds will be received on the morning of July 20, 2009, with an award taking place <br />later that evening at the City Council meeting. <br />Sack in 1999, the City issued the last of its Street Construction Sonds used to finance local street <br />improvements. Since then, the City has relied solely on MSA monies and interest earnings from the City's <br />Street Infrastructure Replacement Fund for this purpose. <br />The 1999 Sonds are scheduled to be retired in 2014. However, given current market conditions the City <br />can financially benefit by refinancing those bonds at today's lower interest rates. The mechanism to <br />achieve this involves the issuance of `refunding' bonds — whereby the City's issues new bonds to pay off <br />the remaining principle on the old bonds. T� levies earmarked for the old bonds are then redirected to pay <br />the new bonds. <br />POLICY OBJECTIVE <br />The City's Council-adopted Debt Service Policy encourages the City to refinance outstanding debt <br />whenever it is financially beneficial. <br />FINANCIAL IMPACTS <br />The estimated financial impact will be made available at the City Council meeting, pending the bid award. <br />Preliminary estimates suggest a present value savings in the amount of $22,800 over the next 5 years. <br />STAFF RECOMMENDATION <br />At the City Council meeting, Staff will recommend the Council approve the attached resolution awarding <br />the sale of the 2009 Refunding Sonds. <br />Page 1 of 2 <br />