City Council Minutes 1992 06 02 - Laserfiche WebLink

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opportunity for the City to refinance certain of its outstanding lease obligations, just as homeowners have done due to low interest rates. The General Obligation Bond route would be the most effective means of financing and effecting this refinancing of outstanding leases. This transaction in no way includes any new money. This is a refinancing of outstanding obligations in order to save money for the City and the taxpayers. Howard: Part of the reason that I wanted to look into the refinancing of Bonds was because of some reoccurring debt "bubbles" in our Golf Course. I would like to smooth that out, so that we don't have a cash flow problems down the line. Is it your contention that we could level out our cash flow at the Golf Course and get a better interest rate or not? Briggs: That is the conclusion that we've drawn based upon a review of a refunding of the Certificates of Participation, which financed the construction of the Golf Course. That transaction requires payments of the City this year of $433,000.00. That annual payment escalates to just at $650,000.00 per year by the year 2013, when those Certificates mature. The refunding transaction could allow the City to not necessarily level the payment, which would result in quite a significant increase in the early years, but to reduce the amount of the increase in the later years. In having reviewed the finances of the Golf Course and the projections of the Golf Course operator, that would be the best way to reduce the risk that the City faces in terms of being able to make those payments. Howard: I was concerned that the City had a number of lease purchases that are at reasonably high interest rates. I would like to know the total value of the lease purchase dollars and the average interest rate that the City is paying and some reasonable projection as to what the City would be paying.