Summary The City currently has the need to pursue financing for the following:
A) Refinancing of Series 2006 Capital Improvement Bonds;
B) Financing for the construction of an Operations/Warehouse facility; and,
C) Financing for development of Project Legacy - Phase I.
As such, the Finance Department has consulted with PFM, the City’s financial advisers, regarding these needs. Primary discussion regarding possible financing alternatives centered on the availability of funds based on need, term and timing.
Upon review of these factors, it is the mutual opinion of PFM and City staff that the necessary financing be pursued from the bond market. It is anticipated that bond proceeds of about $17.5 million will be required. Of this amount, approximately $7.3 million would be dedicated to the refinancing of the Series 2006 Capital Improvement bond with a term of twenty years and the remaining $10.2 million allocated to the Operations/Warehouse facility and Project Legacy with a term of thirty years. It is expected that the true interest cost for this issue would be around 3.89%. Additionally, the net present value savings from the refinancing of the Series 2006 bonds would be approximately $459,000 and the current sinking fund of $627,000 would no longer be required.
The engagement letter authorizes PFM to initiate the process of securing financing and details its responsibilities through the issue closing. These services include a flat rate of $27,500 plus "out of pocket expenses" and would be rolled in with other issuance costs as part of any financing package.
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