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Amended REQUEST FOR COUNCII. ACTIUN Date: 11i26101 Item No.: Department Approval: Manager Reviewed Agenda Section l� �� Reports and Recommendations G Description: Resolutions Providing for the Defeasance and Call of the General obligation Tax Increment Refunding Bonds, Series 1998 dated March 15, 1998 Background The City has reviewed the cash flows, including funds available, to defease outstanding General obligation Tax Increment Refunding Bonds, Series 1998 for the Maturity dates of March l, 2003 and (ater. Our review indicates that considering the level nf current short-term interest rates (2%) as compared to the interest cost presently being incurred on the $8,045,000 outstanding bonds (4+%) along with the positive affect on the City's debt per capita, a defeasance and call be put in place. Attached are drafts of a Resolution approving the defeasance program, an escrow agreement to entered into with Wells-Fargo Banks, a notice of Deposit to the escrow agent, a legal opinion from the City's Bond Counsel, and a Note for repayment of tax increment advances to the escrow. Policy Impiications The establishment of a defeasance and call for the Series 1998 bonds is within the City's Debt Management Policy in that current interest earnings (2%) are less than the City is incurring on the outstanding bonds (4%), thus achieving a significant economic advantage to the City. Financial Implications There are current pooled tax increment funds on hand to achieve this defeasance and since it is current city policy to utilize tax increments for only debt retirement, it is to the City's advantage to pay off current debt by the defeaseance and call of the Series 1998 hond issue. Staff Recommendations Staffis recommending that the City Council approve the attached resolutions effectingthe defeasance and call of the Series 1998 bonds. Council Action A Motion to approve the attached resolution approving the defeasance program and authorizing the Mayor and City Manager to sign the final documents. A Motion to approve the escrow agreement to be entered into with Wells-Fargo Banks. A motion to apprave the notice of Deposit to the escrow agent. A motion to approve the attached resoludon providing for an interfund Loan to Refund the Centre Pointe Project TIF Bonds.