Memorandum

City of Lawrence

Finance Department

TO:	Dave Corliss, City Manager
FROM:	Ed Mullins, Finance Director
CC:	Diane Stoddard, Assistant City Manager Cynthia Wagner, Assistant City Manager
Date:	July 20, 2010
RE:	Resolution No. 6897, authorizing the issuance of bonds

Background

The City of Lawrence has executed two Kansas Public Water Supply Loan agreements for water system improvements, one in 2001 and a second in 2002.  The loans were received from the state and are known as State Revolving Loan Funds (SRF).  One of the SRF loans was for the treatment of lime residuals (SRF Loan 2087) and the second was for an expansion at the Clinton Water Treatment Plant (SRF Loan 2285).  Both of the loans are scheduled to mature in 2023 and total approximately $8.6 million in outstanding principal.  In order to refinance the SRF 2087 a resolution authorizing the issuance of $5.6 million in general obligations bonds needs to be approved by the City Commission.  A resolution authorizing the sale of general obligation bonds was approved for SRF 2285 in 2001.

The City Commission authorized the City Manager to sign a notice of intent to refinance the SRF loans on July 20, 2010.

Description

In order to complete the refinancing, a resolution authorizing the sale of $5.6 million in general obligation bonds to refund the existing SRF Loan 2087 needs to be approved.  It is planned to combine the issuance of the general obligation bonds for refinancing SRF loans 2087 and 2285 with the bonds to refinance the temporary note maturing on October 1, 2010.

The bond sale will occur in either late August or early September.   The bond will be paid with water and sewer revenue.

Recommendation

It is recommended that the City Commission approve Resolution No. 6897, authorizing the issuance of $5.6 million in general obligation bonds to refund SRF Loan 2087.