City Council Minutes 1987 06 02 - Laserfiche WebLink

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06/02/87 DISCUSSION OF REFUNDING/RESTRUCTURING OF SEWER BONDS Hundley explained •that on May 26th the Finance Committee held a lengthy discussion regarding the potential benefits of refunding/restructuring the City's existing sewer bonds. At that time, the City's bond underwriter, Russ Caldwell of Kirchner Moore and Co., identified the potential savings the City could experience if it were to refinance its existing sewer bonds. Additionally, the Finance Committee also looked at the potential benefits of restructuring the City's current bonded indebtedness from 15 to 20 years. Although the savings through refinancing is not as great if restructuring occurs, this restructuring may also provide some benefits to the City by spreading the current debt load out over a more reasonable period of time. Russ Caldwell, Rir<:hner Moore and Co., described in more detail and his recommendations on this issue. Caldwell stsated that on December 15, 1985, the City issued $2,,755,000 in Sewer Revenue Bonds. Since that time, Kirchner Moore has been monitoring bond market conditions to locate a time to refund the debt to save the City money. A favorable refunding environment has existed since May 14, 1987 and it. is now possible to save money on refunding the Ci.ty's 1985 bonds and two smaller issues. With the two options presented, Caldwell recommends the 20 ~-ear program. Szymanski stated tYiat initially the Finance Committee was concerned with the 20 year program as the City is' incurring to some degree a greater amount of debt due to the increase interest over the additional five years. However, reducing the annual payment and having additional population to help make the annual payments long term was a large consideration since estimated revenue from water taps was revised downward again this year. Should revenue build up enough, these bonds can be called back early and avoid that extra interest. Mayor Fauson moved that Council direct staff to begin the process of refinancing/restructuring the City's sewer debt for the 20 year term presented by Mr. Caldwell. Szymanski seconded. Unanimous. UPDATE - THE REMOVAL OF DEBRIS FROM DITCHES Phare explained that as a result of Council's concerns regarding the maintenance of local ditches by ditch companies, Public Works Department requested the City Water Attorney's office to review the situation and prepare an opinion as to the C:ity's options in this matter. 9