Memorandum

City of Lawrence

Finance Department

TO:	Diane Stoddard, Interim City Manager
FROM:	Bryan Kidney, Finance Director
Date:	June 16, 2015
RE:	Resolution 7126 Authorizing the Offering for Sale of Water and Sewage System Refunding Revenue Bonds, Series 2015-B.

Background 

The City of Lawrence revenue bond series 2005 has outstanding balance of $12,720,000. The original bond was issued to finance a variety of water and wastewater projects in 2005 for a total issue size of $25,910,000 with a final maturity date of 11/01/2025.

The 2005 bonds included a provision to call outstanding maturities after 2015. The average interest rate the City is paying for the outstanding maturities for years 2016 through 2025 is 4.25%. The market rates for the same years of maturities are estimated to average 2.52%. If the City issues new revenue bonds and use the proceeds from the new sale to pay-off the 2005 bonds, the latest estimated savings (net of issue costs) is a present value of $983,322. The savings are not included in the latest rate model. However, any savings could be applied to infrastructure improvements not currently funded (see Resolution 7126 and the Recommendation).

Staff would like to offer the bonds at a competitive sale at 11:00 AM on July 14, 2015.

Action Requested   The City Commission is requested to approve Resolution 7126 authorizing the sale of water and sewage system refunding revenue bonds, series 2015-B.