Memorandum

City of Lawrence

Finance Department

TO:	David L. Corliss, City Manager
FROM:	Ed Mullins, Finance Director
Date:	August 6, 2009
RE:	2009 Revenue Bond Resolution

Our bond counsel, Gilmore & Bell, has revised the amount of debt service reserve required for the Series 2009 water and sewer revenue bond issue.  The bonds were sold as taxable Buy America Bonds and include a 35 basis point rebate from the United States Treasury Department.   The debt reserve was initially calculated as the highest total principal and interest payment to be made on the bonds.  However, after additional review it was determined that the debt reserve should have been calculated on the principal and interest payment less the amount of rebate.  This reduced the debt service reserve to $667,129.50 from $836,935.00.  The difference of $169,805.50 will be used to pay a portion of the first interest payment due on May 1, 2010.

In order to legally enact the change, Resolution No. 6860 needs to be approved by the City Commission