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Department Approval: �� REQUEST FOR COUNCIL ACTION Manager Approved: �� Date: 2/9/2004 Item No: 3,13 Agenda Section: �or,s��it Item Description: Request for Authorization to Refund (refinance) the 1997 General Obligation Bonds Background In 1997, the City issued $2,750,000 in general obligation improvement bonds to finance the reconstruction of various neighborhood streets. The current interest rate market continues to be favorable, providing the City an opportunity to refinance the remaining debt service at a lower interest rate. The mechanism to accomplish this is for the City to issue Refunding Bonds, which in effect pay off the original bonds. The City then makes payments on the Refunding Bonds. The mechanism is similar to a homeownerrefinancing their mortgage. � To comply with all legal requirements, the City Council is asked to formally authorize the issuance of General Obligation Refunding Bonds, establish the terms and conditions of the offering, and to establishthe date and time of receiving bids. Specific action is noted below. Discussion Items City Staff has asked Springsted Financial Advisors to prepare and print the official statement document, coordinate the bidding process, and facilitate the legal filing requirements. The City will issue $1,760,000 million in general obligation refunding bonds to be sold by bid on Monday, March 8, 2004. Consideration of the bids will be made by the City Council at the scheduled City Council meeting later that evening. The City can expect to close on the bonds and take possession of the proceeds in April, 2004. Depending on the final bids, Staff expects the City to realize a present value savings of $140,000. This will allow for the City to reduce its annual debt service levy for this bond issue by $15,000.