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Cas. on brought forth Delta's Hanover Index, which is used to <br />calculate the savings, the deterioration in interests rates on tax <br />exempt is only five basis points. The initial projections were at <br />an interest rate of 5.25 as of today that rate if 5.30. The <br />question of inflation and supply situation at the long end there is <br />volatility. Colorado is unique on a national basis relative to the <br />supply, because of the impact of Amendment One, many issuers have <br />had. to delay the normal pace of their issuance until after <br />authorizing elections in November. Currently, there is a scarce <br />supply of tax exempt bonds in Colorado and anticipate that after <br />the November elections the supply will be greater. <br /> <br />Mayer asked how much five bases points change the net present value <br />and. Cason replied very, very little, less than $10,000. <br /> <br />SiE. k asked about the cost of issuance, noted in the presentation it <br />would be somewhere around $100,000. Cason replied that that was <br />correct. <br /> <br />Sis.k wanted to know, if that figure was included in the present <br />value savings. Cason replied that the present value savings is net <br />of that cost of issuance. If no cost of issuance, the savings <br />wo~ld be $770,000. <br /> <br />Sis, k wanted to know, if the bonds would be marketed through <br />Kirkpatrick. Cason replied, yes, Kirkpatrick Pettis is owned by <br />thE: Mutual of Omaha and is the second largest in Denver in terms of <br />volume of transactions and number of employees. <br /> <br />Sis.k inquired about the predictability of rates and at what point <br />locked into a rate? Cason replied that not until you actually <br />pr~.ce (November 6 on schedule). <br /> <br />Sisk wanted to make clear that by the issuance of these bonds the <br />City would not be extending the life of the 1989 bonds with regard <br />to the pay off date. Cason replied that this transaction meets all <br />the Amendment One criteria for refunding without the vote, that the <br />maturity is not extended and a net present value saving. <br /> <br />Sis~k asked about getting a statement from Bond Disclosure Council <br />that the refunding does not violate Amendment one and a signature <br />in part for the $25,000 expended. Cason replied yes. <br /> <br />Ho~'ard asked about why the sales tax refunding is advantageous to <br />do rather than the normal general obligation bonds. Cason replied <br />that in terms of Amendment One's requirement for a vote to <br />authorize refunding, the rating agencies have taken different <br />pr¢.spectives, when they look at general obligation bonds vs sales <br />tax. Viewing in general obligation bond, unless clearly and <br />in~.tial authorization from a vote for an increase in mill levy that <br />you. may after refunding a bond issue go from a general to a limited <br />pledge yield bond. Sales tax bond issues there is not that concern <br /> <br /> <br />