FIN 2021-04-26 Item 1B - Ordinance - Issue Debt for General Fund Portion of Public Safety Plan: Public Works Shops Project

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INFORMATIONAL MEMO Page 2 December 2020. Given the current interest rate environment and the uncertainty of future interest rates, it is the City's best interest to pursue a refunding of these bonds. Per the City's current debt policy, adopted by Resolution No. 1840, the City will refinance debt to achieve debt service savings as market opportunities arise. DISCUSSION As of May 2021, the outstanding balance of the 2011 LTGO bonds is $1,545,000 plus total interest of $98,700. The 2014 refunding LTGO bonds have an outstanding principal amount of $3,101,000 and total interest is estimated to be $748,907. Total interest is subject to change depending on the interest rate in effect from 2025 through 2034. An RFP will be circulated to banks at the end of April 2021 to determine what banks are interested in submitting a proposal. Review of the proposals is tentatively scheduled for May 20, 2021 with an expected closing date of June 8, 2021 for the component related to the PW Shops Phase I project and a closing date of September 2, 2021 for refunding the 2011 and/or 2014 outstanding bond issues. The draft ordinance delegates authority to the Finance Director to select the proposal that is in the best interest of the City (if any) and to approve the interest rate and terms of the bond within the parameters set forth in the ordinance. If a proposal is accepted, the Finance Director will report back to the full Council on the details of the agreement. RECOMMENDATION The Council is being asked to approve the ordinance and consider this item at the May 10, 2021 Committee of the Whole meeting and subsequent May 17, 2021 Regular Meeting. ATTACHMENTS Draft Ordinance 28