Laserfiche WebLink
Russ Caldwell, City's financial advisor, stated <br /> that he set with the finance Committee explaining <br /> that the original issue of these .bonds was <br /> purchased by one financial institution. Recently, <br /> that financial institution contacted Caldwell and <br /> said that their portfolio had changed and that <br /> they wanted to sell these bonds back. After <br /> careful analysis, Kirchner Moore bought the bonds <br /> in hopes that refunding could work to the benefit <br /> of the City of Louisville. Pending legislation <br /> dictates that once bonds are issued, they can only <br /> be refunded twice. That rule will take effect <br /> when the tax bill passes this year. This <br /> particular one will not 'count' as it has been <br /> grandfathered in under the wire. it will lower <br /> the City's total debt, gross reduction, (net <br /> savings to the City) by $202,000. In addition, <br /> present value of this $202,000 is $70,600 and is <br /> highly desirable in texas of any standard known in <br /> the industry. <br /> In response to Mohr's questions, Caldwell stated <br /> that the City's savings is going to occur <br /> basically by eliminating the major portion of that <br /> payment in the year 2000. This can be changed in <br /> such a way that it present values that number back <br /> to 19066 however the industry standard is that you <br /> reduce it where you have highest rate of repayment <br /> which is out at the end. There say not be two <br /> more opportunities to refund and the saarket is <br /> better now than it has been in seven years. <br /> Caldwell feels that froaa a debt management <br /> perspective this is the best way to organise the <br /> refinancing structure. <br /> Carrival, Ssymanski and Scarpella serve on the <br /> Finance Committee. Scarpella commended Caldwell <br /> for his efforts and supports his recoaaendations. <br /> Ssysanski concurred. <br /> In response to questions by Mohr suggesting <br /> possible need for funds now vs. later for water <br /> purchases, etc., Caldwell stated that there were <br /> financing tools available to the City that would <br /> be more cost effective to do short term note issue <br /> that would have lower rates than these -- probably <br /> 4 to i 1/4 percent. <br /> Caldwell further explained that once you do a bond <br /> issue its Kirchner Moore'• responsibility in <br /> representing the City to seek every opportunity to <br /> lower that debt as a debt naaageueat issue rather <br /> than an additional acquisition issue. Kirchner <br /> Moore's commission on these bonds is about 2.7 <br /> percent. <br /> 3 <br />