Title
2005 Interest Rate Swap (B)
A Resolution of the City of Gainesville, Florida, approving the form and authorizing the execution and delivery of a confirmation with Citibank, N.A., New York pertaining to an interest rate swap transaction relating to taxable bonds issued by the City under Resolution No. 020918, as supplemented and amended; delegating to the City Manager, the Administrative Services Director or the Finance Director of the City the authority to execute and deliver such confirmation and related documents on behalf of the City under certain delegation parameters; providing certain other details in connection with such transaction; providing an effective date.
Explanation
In March of 2003 the City issued the Series 2003A & B Taxable Pension Obligation Bonds in the combined amount of approximately $89,895,000. The proceeds of the issue were deposited into the City's defined benefit pension plans to discharge the Unfunded Actuarial Accrued Liabilities (UAAL) in each plan. The 5.61% true interest cost on the bonds was significantly lower than the interest rate of 9.25% for the General Employees' Pension Plan and 8.5% for the Consolidated Police Officers' and Firefighters' Pension Plan previously carried on the plans' respective UAAL. The debt issuance is projected to generate gross savings of approximately $78 million dollars and present value savings of approximately $34 million dollars over the life of the issue.
Additionally, in July of 2005 the City issued $35,210,000 in Series 2005 Taxable Other Post Employment Benefit bonds. The proceeds of this issue were deposited into the Retiree Health Insurance Fund to take out the UAAL in the Retiree Health Insurance Plan; the 4.87% true interest cost on the bonds, when compared with the 9% interest rate carried on the Retiree Health Plan UAAL, is projected to produce a gross savings of approximately $7 million dollars over the next ten years and approximately $5.5 million in net present value...
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