Title
Refunding of Utilities System Revenue Bonds, 2003 Series A and 2005 Series A (B)
Staff is recommending the adoption of an Authorizing Resolution.
Explanation
In December 2006, the City Commission, among other things, (1) authorized the refunding of all or a portion of the 2003 and 2005 Series A Bonds through the issuance of variable-rate bonds (Refunding Bonds) that are converted synthetically to a fixed interest rate through the use of one or more "floating-to-fixed" interest rate swaps; and (2) approved the selection of Bear Stearns as the sole Underwriter/Remarketing Agent for the Refunding Bonds.
Upon the advice of the Utility's Financial Advisor, Utilities staff entered into an interest rate swap transaction on December 7, 2006. The swap was competitively bid, with Goldman Sachs Mitsui Marine Derivative Products, L.P. (GSMMDP) as the winning bidder. This swap with GSMMDP permitted us to achieve a favorable fixed rate of interest for a synthetic advance refunding of a portion of the 2003 and 2005 Series A Bonds and is expected to provide net present value savings of approximately $8.5 million.
The issuance of the 2007 Series A Bonds is scheduled to occur on March 1, 2007 in order to complete the advance refunding of a portion of the 2003 and 2005 Series A Bonds. We recommend that the City Commission adopt the attached Authorizing Resolution which approves the sale of the 2007 Series A Bonds.
The Clerk of the Commission, the General Manager or other Authorized Officers of the City may be required to take certain other actions and hire certain other professionals to proceed with the issuance of the 2007 Series A Bonds as described above. Therefore, we recommend that these officials be authorized to take such other actions that may be necessary or desirable to proceed with the issuance and closing of the bond issue in accordance with this City Commission authorization.
Recommendations
The City Commission: 1. Adopt the attached res...
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