This Ordinance authorizes the sale of bonds for the purpose of providing funds to refund the callable portion of the 2009 outstanding general obligation (G.O.) bonds of the City.  All refunded bonds will be called for redemption in accordance with the legal documents authorizing their issuance.  All refunded bonds will be called at a price equal to 100% of the par value.

The total cumulative gross savings from the bond issue is expected to be approximately $867,633 and the Net Present Value savings is expected to be approximately $668,854. The Net Present Value takes into consideration the time value of money and the structuring or timing of the future debt service. The savings of $668,854 represents 9.47% of the prior issue.

The interest rates today are significantly less than the rates on the existing general obligation bonds. The existing interest rates range from 4% to 4.5%. The anticipated interest rates for the refunding bonds range from 1.41% to 1.92%. The existing bond issue matures in 2028 and the proposed issue keeps the term the same.

The sale is expected to be conducted on August 16th. The bond closing is scheduled for September 13th. The ordinance authorizing the issuance of the bonds is attached for approval by the City Council. The ordinance sets the form, details of, and authorizes the issuance and delivery of the refunding bonds. It also provides for the levy and collection of annual tax for the payment of the principal and interest for the Refunding Bond Series, Series 2016.

Also attached is the Paying Agent/Registrar agreement with Bank of New York Mellon.

The anticipated savings from the refunding is expected to generate fair value saving from cash flow of $867,633, or average annual saving of $72,303.

I make a motion to approve Ordinance No.__________ authorizing the issuance of the General Obligation Refunding Bonds, Series 2016 and the Paying Agent Registrar agreement with Bank of New York Mellon.