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CASSI;LI3I;RRY CITY COMMISSION Minutes of July 25, 2011-Regular I/leeting Page 10 of 18 refimding note which matures in 2018. This would replace the two notes issued in 2002. The combined principle balance at present is $3,079,000 (including an estimated $25,000 in issue costs). Potential interest savings may approximate $75,000 over the short life ofthe new sales tax reissue loan. It would be called Sales Tax Refunding Bond, Series 2011B. The note will mature October 1, 2018 which is the same as Sales Tax Refunding Note, Series 2002B. A rate of 2.75% may apply to a new 15 year capital improvement note to pay for transportation improvements. It would be called Sales Tax Revenue Bond, Series 2011 A. The principle amount would be $5,330,000 (including an estimated $25,000 in issue costs). Volatility in the marketplace, complexity of the transactions and the right to prepayment penalty held by the current issuer of the 2002 Sales Tax Notes make it in the best interest of the City to seek a negotiated issue of the new debt and reissue of the existing debt. The approval of Resolution 11-2287 will authorize City staff to negotiate the new financing terms for both notes and empower the Mayor to execute the same. The City Manager distributed maps to the City Commission depicting the condition of the pavement on all city roadways, relating to proposed transportation improvement projects to be fimded with the new financing. Budget Impact: Loan proceeds for the Series 2011A transportation improvement loan are estimated to be $5,330,000. The proceeds ($5,305,000 would be set aside in a Capital Improvement Fund and would be budgeted by the City Commission to pay for transportation proj ects. Issuance costs for the Series 2011A loan would be funded to capitalize in and amortize from the Debt Service Fund. The proceeds ofthe Series 2011B reissue loan are estimated to be $3,079,000. The reissue loan will pay off both sales tax notes issued in 2002 and fund issue costs of $25,000. Interest payable on the 2002 loans at the time of pay-off is estimated to be $31,015. Budget Amendment #11-048 is provided to effect the transactions. BA# 11-048: Explanation of Request: Authorization is requested for the negotiated placement of Sales Tax Revenue Bond, Series 2011A and Sales Tax Refunding Bond, Series 2011B. The 201 lA bond will raise principle in the amount of $5,305,000 to be set aside in a capital improvement fund and budgeted by the City Commission to pay for transportation projects. The 2011B reissue bond will refinance Sales Tax Revenue Refunding Note, Series 2002A and Sales Tax Revenue Note, Series 2002B at a lower interest rate estimated to save approximately $75,000 over the life of the new reissue loan. $50,000 is estimated in proceeds to fiend issuance costs to be capitalized and amortized from the Debt Service Fund. Account Number Account Description Amount INCREASE: 201-0190-517.71-07 Principle - STRN 2002A $1,187,000 201-0190-517.71-08 Principle - STRN 2002B $1,867,000 201-0000-383.00-O1 Debt Proceeds $3,104,000 201-0190-517.72-07 Interest - STRN 2002A $ 19,105 201-0190-517.72-08 Interest - STRN 2002B $ 11,910