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CASSI;LBI;RRY CITY CONIMIS5ION Minutes of July 25, 2011-Regular Meeting Page 8 of 18 SERIES 2011 BOND; APPOINTING THE CITY AS PAYING AGENT AND BOND REGISTRAR FOR SAID SERIES 2011 BOND; AND PROVIDING AN EFFECTIVE DATE." Staff Presentation: Mr. Randy Newlon, Finance Director, stated Resolution 11-2282 provides for authorization to negotiate the sale of Utility System Refunding Note, Series 2011 and approve the related Budget Amendment #11-047. Resolution 02-1381 authorized the issuance of Utility System Revenue Note, Series 2003A for capital improvements to the utility system and a share of the design, engineering, acquisition and construction of the Iron Bridge Wastewater Treatment Plant in the principle amount of $5,400,000 with an interest rate of 3.85% to mature in 2021. It was issued with a companion note, Utility System Revenue Refunding Note, Series 2003B. Note 2003A was structured to be an interest only note until Note 2003B is paid off in 2014. The principle balance is still $5,400,000 today. The note was issued by SunTrust Bank and includes apre-payment penalty provision. Favorable interest rates currently exist in the market. It would benefit the City to refinance Utility System Revenue Note, Series 2003A at a lower interest rate. The City's financial advisor, Dunlap and Associates, has estimated an interest rate of 2.75% may be possible with the potential interest savings exceeding $400,000 over the life of the new loan. If refinanced, issue costs are estimated to be $25,000 and will be capitalized as a deferred charge and amortized over the life of the new loan. The term of the new loan would be the same as the existing loan. Approval of Resolution 11-2282 will authorize City staff to negotiate the new financing terms and empower the Mayor to execute the same. Budget Impact: Loan proceeds are estimated to be $5,400,000. They will be used to pay-offthe principle of Utility System Revenue Note, Series 2003A at $5,400,000. Approval of related Budget Amendment # 11-047 is Iequested. BA# 11-047: Explanation of Request: Authorization is requested for the negotiated placement of Utility System Refunding Note, Series 2011 in order to refinance Utility System Revenue Note, Series 2003A at a lower interest rate. Account Number Account Description Amount INCREASE: 401-0190-517.71-41 INCREASE: 401-0000-383.01-00 Principle - UT Rev Rfnd Note 2003A $5,400,000 Debt Proceeds $5,400,000 Recommendation: The City Manager and the Finance Director recommended approval of Resolution 11- 2282 and related Budget Amendment #11-047. Audience Input: The following individual came foI•ward to address Resolution 11-2282: 1) Ml•. John Casselberly, 700 South Lost Lake Lane, voiced concerns regarding the original utility system transaction fiom 1973 fiom his family, and preservation of the related financial records.