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Adopt Resolutions Related to Proposed Refunding of Outstanding Build America Bonds (BABs).
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Staff:
Department:
Maurice Jones, Town Manager
Manager's Office
Amy Oland, Director
Business Management
Overview: The Business Management Department is currently pursuing refunding the outstanding balance on the Town's Taxable General Obligation Public Improvement Bonds originally issued in October 2010. The attached resolutions would provide preliminary approval for the issuance of refunding bonds, adopt the bond order and provide for the publication of the bond order.
Recommendation(s):
* That the Council adopt the Preliminary Resolution Supporting an Application to the Local Government Commission for its Approval of Refunding Bonds in an estimated amount of up to $12,500,000. The resolution authorizes the Town Manager, Finance Officer and other Town representatives to take steps necessary to proceed with the refunding of the 2010 Bonds. The actual sale of the bonds is subject to further Council approval; and
* That the Council adopt the Bond Order for General Obligation Bonds, which is the basic authorizing document for refunding bonds that North Carolina General Statutes require; and
* That the Council adopt the Resolution Providing for the Publication of the Bond Order.
Key Issues:
A recent drop in tax-exempt municipal bond rates has resulted in opportunities for the Town, through refunding, to save money on its annual debt service by reducing the net interest cost of debt. Based on the analysis performed by the Town's financial advisors, Davenport & Company, there is currently an opportunity to refund the outstanding balance on the Town's Taxable General Obligation Public Improvement Bonds that will provide a net present value savings of approximately $689,031 over the remaining life of the bonds.
Due to volatility in the interest rate markets the projected savings may change prior to execution. If there are extreme changes in interest ra...
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