Memorandum

City of Lawrence

Finance Department

TO:	Thomas M. Markus, City Manager
FROM:	Bryan Kidney, Finance Director
DATE:	April 19, 2016
RE:	Actions to refund the City’s 2000 State of Kansas Revolving Loan.

Background

The City of Lawrence outstanding 2000 State of Kansas Revolving Loan has an outstanding balance of $18,301,688. The loan was entered into in order to finance a variety of water and wastewater projects in 2000 for a total loan amount of $43,495,991 with a final maturity date of 7/01/2022.

The loan includes a provision that allows for early repayment of the loan. The average interest rate the City is paying for the loan for years 2016 through 2022 is 3.19% plus an annual fee. The market rates for the same years of maturities are estimated to average 1.35%. If the City issues bonds and use the proceeds to pay-off the 2000 loan, the latest estimated savings (net of issue costs) is a present value of $700,504.

Staff would like to offer the bonds at a competitive sale at 11:00 a.m. on June 7, 2016.

Budget Impact

The debt service is included in the 2016 budget and included in the City’s utility rate model.

Action

The City Commission is requested to:

1. Adopt Resolution No. 7157, authorizing improvements to the water and sewage system of the City, and providing for the payment of the costs thereof.

2. Adopt Resolution No. 7158, establishing the maximum annual bonding amount for public improvements pursuant to Charter Ordinance No. 27.

3. Adopt Resolution No. 7159, authorizing the offering for sale of general obligation refunding bonds, series 2016-A.