Item No: 5E.
Meeting Date: April 22, 2013
From: William Spinelli, CPA, Director of Finance
Subject: Resolution authorizing issuance of City of Leesburg Capital Improvement Refunding Bonds, Series 2013, to refund the City’s outstanding Utility System Revenue Bonds 2004.
Staff recommends adoption of both the Series and Supplemental resolutions (the “Resolution”) authorizing the issuance of the City of Leesburg Capital Improvement Refunding Revenue Bonds, 2013 (the “2013 Bonds”) in a total aggregate principal amount of not to exceed $16 million; approving substantially final forms of the Series Resolution, Preliminary Official Statement, and bond purchase agreement; and authorizing and approving other related actions in connection with the issuance of the 2013 bonds.
Approval of the recommendations will allow the issuance of the 2013 Bonds to refund all the outstanding City of Leesburg Capital Improvement Revenue Bonds, 2004 to the extent such refunding of the 2004 Bonds meets the City’s Debt Management Policy savings objectives and the requirements stipulated in the City’s 2004 Master Capital Improvement Resolution.
The proposed 2013 Bonds will refund $16 million of outstanding 2004 Bonds to the extent that economic savings are realized. Based on the current market pricing as of April 9th, the City estimates total refunding savings of approximately $1,397,000, or approximately 6.90% of the par amount of 2004 bonds refunded. Such estimated savings are well above the City’s savings objectives of a minimum of 3 to 5% PV Savings. Per prior City Commission briefings and directives to Staff, this refunding does not extend the current maturity of the bonds, and does not include any new project fund monies. The City team was able to have its Underlying ratings confirmed with all three agencies, and these ratings helped the City Team negotiate reductions in Bond Insurance fees, the ability to only insure approx. 50% of the issue generating additional upfront savings, and also reduced fees for the Debt Service Reserve Surety Policy. We estimated these upfront savings to be in excess of $100,000.
1. Approve the resolution authorizing issuance of not to exceed $16 million in aggregate principal amount of its Capital Improvement Refunding Bonds, Series 2013, to refund the City’s outstanding Utility System Revenue Bonds 2004.
2. Such alternative action as the Commission may deem appropriate
Subject to the market, the 2013 Capital Improvement Refunding Revenue Bonds are estimated to produce an average annual savings of $55,000-$65,000 per year to the City's General Fund.
Prepared by: W. Spenilli__
Attachments: Yes____ No X___
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head __WS______
Finance Dept. _BLM, ____________
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________