Title
Consideration of and action to amend and restate the ordinance for the cash defeasance and redemption of Certificates of Obligation, Series 2014.
Body
Summary:
At the City Council meeting held on August 15, 2023, City Council adopted ordinance number 23-4442 authorizing the defeasance and redemption of Certificate of Obligation, Series 2014. The original ordinance stated the redemption date as March 15, 2024, however, it is necessary to move the redemption date to April 15, 2024 in order to satisfy the thirty (30) day notice requirement to the paying agent, Bank of New York, and bond holders prior to the redemption of the debt.
As previously discussed, the Certificates of Obligation, Series 2014 was originally to be fully amortized in March of 2034. The City has the opportunity to partially defease the series 2014 debt which would allow the obligation to be paid in full by March of 2032. In addition, by doing so, the City is able to maintain the .720000 per $100 valuation tax rate and save $382,900 in future interest costs.
The proposed defeasance was to be paid on April 15, 2024 is $1,055,000 to be applied to the principal portion of the outstanding debt. An additional $8,500 of bond related fees is expected. The principal payment plus the bond related fees equals a total cost of $1,063,500.
The $1,063,500 cost of the proposed defeasance will be funded by ad valorem tax revenues levied in the 2023 tax year. This amount was included in calculation of the debt service portion of the tax rate adopted by Council on September 19, 2023.
Fiscal/Budgetary Impact:
The $1,063,500 cost of the proposed defeasance will be funded by ad valorem tax revenues levied in the 2023 tax year.
Recommended action
Approve the amendment to the ordinance for the defeasance and redemption of Certificates of Obligation, Series 2014.