Memorandum

City of Lawrence

Finance Department

TO:	Thomas M Markus, City Manager
FROM:	Bryan Kidney, Finance Director
Date:	December 12, 2017
RE:	Revenue Bonds, Series 2019-A Sale Results.

At 11:00 this morning, the City opened bids for Water and Wastewater Improvements and Refunding Revenue Bonds, Series 2017-A. Prior to taking bids on the Bonds, Moody’s affirmed its Aa2 rating on the City’s outstanding revenue bonds.

The City received eight bids from interested investment banks, with true interest costs ranging from 2.791% to 3.046%. The bids are summarized below.

Bidder Name		Interest
Raymond James & Associates, Inc	2.791
Bank of America Merrill Lynch	2.801
Janney Montgomery Scott LLC	2.802
J.P. Morgan Securities LLC	2.807
Piper Jaffray	2.814
JJB Hilliard, W.L. Lyons, Inc	2.856
Robert W. Baird & Co., Inc.	2.871
Fifth Third Securities, Inc.	3.056
Estimate as of July 28, 2017	3.18%

The lowest bid, submitted by Raymond James & Associates, Inc. conforms to all of the bidding requirements established by the City. This bid was approximately 39 basis points (0.39%) less than the most recent interest rate projections provided by the City’s Municipal Advisor, Springsted, Incorporated.

Staff and Springsted recommend awarding the bonds to Raymond James & Associates, Inc. As a result of the lower than anticipated interest rates and a premium bid, the total principal amount of the Bonds was reduced from an estimated $18,630,000 to $17,195,000. The Bonds will be payable over the next 20 years with level annual debt service.  

The lower interest rates helped the City utility ratepayers in the refunding of the outstanding 2009 bonds. The City was able to refund debt with a lower interest rate. The present value savings from the refunding portion of today’s sale was $295,000.

The City’s Bond Counsel, Gilmore & Bell, P.C. has updated the draft Ordinance No. 9429 and Resolution No. 7231 to incorporate all of the final terms of the sale to Raymond James & Associates, Inc.