Council Communication

Resolution Authorizing the Sale of General Obligation Refunding Bonds
Meeting Date:	March 1, 2005		Primary Staff Contact:	Lee Tuneberg, Finance Director, 552-2003 tuneberl@ashland.or.us
Department:	Finance		Secondary Staff Contact:	N/A
Contributing Departments:	N/A
Approval:	Gino Grimaldi

Statement: The City of Ashland issued General Obligation (GO) bonds in 1997 for $2,800,000 and $3,310,000 in 2000 to fund various projects. The City may issue current and refunding General Obligation bonds for its outstanding GO bonds pursuant to the Constitution and laws of the State of Oregon. The present value savings of doing so at this time is estimated to be $125,000. Approval of the attached resolution will authorize the Finance Director or designee to sell approximately $2,275,000 in General Obligation bonds to refund latter portions of the Series 1997 and 2000 bonds saving the City money.
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Background: The citizens of Ashland authorized by vote the issuance of General Obligation bonds in May 1997 and November 1999 to fund flood restoration, another refunding and fire station construction projects. Pursuant to those elections, General Obligation bonds were issued for $2,800,000 (Series 1997) and $3,310,000 (Series 2000). Because current General Obligation bond rates have fallen to a level low enough to meet the state refunding requirement of at least 3% savings, latter portions of the City's two outstanding GO issues can be called and refunded to create a savings. The bonds that will be refunded are the Series 1997 bonds that would mature in 2008 to 2011 and the Series 2000 bonds that would mature in 2011 to 2020. This is a normal practice, duly noticed in the covenants of the original sale and taken into consideration when the bonds were sold in the respective year of issue.
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Related City Policies: The City of Ashland has no written policy established for when a refunding is permissible so staff follows the guidelines established in the State of Oregon by the Municipal Debt Advisory Commission.
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Council Options: Council may approve this resolution and staff will take the necessary steps to refund the identified issues reporting back to Council in a reasonable time following completion or Council could defer taking action if members require more information, discussion.
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Staff Recommendation: Staff recommends approval of the resolution.
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Potential Motions: a. Council moves to approve the attached resolution authorizing staff to issue General Obligation refunding bonds. b. Council takes no action pending further information or clarification.
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Attachments: Please click on the link below to view the following attachments: • Resolution authorizing the sale of General Obligation Refunding Bonds • Financial Advisor calculations and details of the proposed refunding. • Cover page for the Series 1997 Official Statement dated December 15, 1997. • Cover page for the Series 2000 Official Statement dated June 1, 2000.

Bond-Resolution-Attachments.pdf (518.6KB)

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