7. Resolution 4326 - Refunding 1986 Sewer Revenue BondsAgenda -March 24, 1997
AGENDA ITEM 7 - RESOLUTION 4326-REFUNDING 1986 SEWER REVENUE BONDS
BACKGROUND/CONSIDERATION: Since December, the Finance Director and
I have discussed reviewing these bonds. The investigation and
information compiled by Amy and D. A. Davidson representatives will
allow a refunding of this issue. The refunding will save the City
approximately $75,000-$100,000. As you will see by the enclosed
financing schedule, timing for the refunding is crucial and we must
take action at this meeting to allow us to proceed within the bond
deadlines.
RECOMMENDATION: This is one of the "no brainer" recommendations.
In order to save the City approximately $75,000-$100,000, I highly
recommend that we process this refunding.
ACTION REQUIRED: Adoption of RESOLUTION #4325 as compiled by D.A.
Davidson and reviewed by our staff is required to begin the
process. This resolution authorizes the Finance Director and City
Manager to establish refunding procedures and allows us to enter
into a bond purchase agreement.
An additional resolution will be required at the May 5th meeting to
finalize the bond resolutions.
it
March 18, 1997 DMA. ®avkim ex Co.
Member SIPC a DADCO company
Fixed -Income Department
Davidson Building
Amy Robertson
City of Kalispell
P.O.IBox rd t5015
Great Falls, MT 59403
P.O. Box 1997
(406) 727-4200
Kalispell, MT 59903 1-800-332-5915FAX (406) 791-7315
Re: Sewer System Revenue Bonds
Dear Amy:
Thank you for calling us concerning the City's Series 1986 Sewer Bonds. As we identified recently,
the City can save a significant amount of money from a refunding of that issue. After thinking about
the potential financing schedule, it occurred to me that time is running short to meet the June 15 call
date on the old bonds. As a result, I felt that it made sense to forward a financing time schedule to
you as well as an information request. Please review these and let me know if you have any
questions.
The time schedule is based on the need to close the issue by May 15. This will allow the City to
direct its paying agent to send out call notices on the 1986 bonds after it has money in the bank from
the refunding bonds. Call notices must be sent 30 days before the redemption date (June 15).
Council action would be required on April 7 and May 5. The April 7 meeting would be when the
council formally authorizes the refunding. They would set minimum savings levels, maximum
interest rates, and maximum underwriter's discount by adopting a resolution. They would also
authorize you and either the Mayor or City Manager to negotiate the final interest rates. Interest
rates would be set and bonds marketed on April 22.
In order to assist in meeting the tight time frame, we would anticipate preparing an abbreviated
offering document for the bonds. This can be done under municipal bond regulations since the deal
is less than $1 million. As a result, the initial disclosure burden on the City will be modest and you
won't incur an annual obligation to update the disclosure information. Please let me know if it will
be possible to provide the information on the enclosed list by April 3.
I will talk to you soon about the schedule and requested information. We would be happy to meet
with City officials and council members if requested.
Sincerely yours,
Aaron T. Rudio
Vice President
ATR:lda
-? 01 kA�^
H
OFFICES • MONTANA a WASHINGTON • IDAHO • WYOMING a CALIFORN
Kalispell Sewer Revenue Refunding
➢ Financing Time Schedule Q
March 18,1997
MARCH 1997
1
2 3 4 5 6 7 8
9 10 11 1,2 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31
APRIL
1997
SU M
T
W
TH F
S
1
2
3 4
5
6 7
8
9
10 I1
12
13 14
15
16
17 I8
19
20 21
22
23
24 25
26
27 28
29
30
MAY
1997
SU
M
T W
TH
F
S
1
2
3
4
5
6
7
8
910
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
RESPONSIBLE
DATE
ACTION
PARTY
March 18
• Request Disclosure Information
DAD
April 4
• Distribute Draft Preliminary Official
DAD
Statement
April 7
• Adopt Resolution Establishing
City
Refunding Parameters and Authorizing
Officers to Enter into Bond Purchase
Agreement
April 11
• Provide Comments on Preliminary
All
Official Statement
April 14
• Print and Distribute Preliminary Official
DAD
Statement
April 21
• Pre -pricing
City/DAD
April 22
• Price Bonds and Execute Bond Purchase
City/DAD
Agreement
April 23
• Distribute Draft Bond Resolution to
BC
DAD/City
May 5
0 Adopt Bond Resolution
City
Kalispell Sewer Revenue Refunding Bonds
Series 1997
SAVINGS REPORT
-
PROPOSED DEBT SERVICE • •
• • • • • .
PRIOR
CUMULATIVE
DATE
PRINCIPAL
COUPON
INTEREST
TOTAL
D/S
SAVINGS
SAVINGS
........ ..............
6/15/97
.......... ..............
..............
8.796.75
8,796.75
.............. ..............
88,651.25
....•••.•.....
79.854.50
•65,445.50
12/15/97
21,397.50
6/15198
80,000.00
4.350000
21.397.50
122.795.00
128,562.50
5.767.50
-59,678.00
12/15/98
19.657.50
6/15/99
85,000.00
4.550000
19.657.50
124.315.00
134,077.50
9,762.50
-49,915.50
12/15/99
17.723.75
6/15/ 0
85.000.00
4.700000
17,723.75
120,447.50
138,827.50
18.380.00
-31,535.50
12/15/ 0
15.726.25
6/15/ 1
90.000.00
4.850000
15,726.25
121,452.50
142.877.50
21,425.00
-10,110.50
12/15/ 1
13,543.75
6/15/ 2
95.000.00
4.950000
13.543.75
122,087.50
136,180.00
14.092.50
3,982.00
12/15/ 2
11,192.50
6/15/ 3
100,000.00
5.050000
11.192.50
122,385.00
129,435.00
7.050.00
11,032.00
12/15/ 3
8.667.50
6/15/ 4
105,000.00
5.150000
8,667.50
122,335.00
127,690.00
5.355.00
16,387.00
12/15/ 4
5.963.75
6/15/ 5
110.000.00
5.250000
5.963.75
121,927.50
155,590.00
33,662.50
50,049.50
12/15/ 5
3,076.25
6/15/ 6
115.000.00
5.350000
3.076.25
121,152.50
166,005.00
44,852.50
94,902.00
..............
865,000.00
.-••---.......
...----•----•-
242,694.25
1.107.694.25
..............
1.347.896.25
.........-----
94.902.00
ACCRUED
865.000.00
242,694.25
1,107,694.25
1,347,896.25
94,902.00
Dated 4/ 1/97 with Delivery of 4/ 1/97
Bond Years 4.767.806
Average Coupon 5.090272
Average Life 5.511914
N I C X 5.453122 X Using 98.0000000
N 0 T E : Cumulative Savings are Net of the Initial Transfer Amount of 145,300.00
Net Present Value Savings at: 5.5200X Equals 49,545.40 or 5.7278X of Par of the Current Issue
or 5.1880X of Par of the Prior Issue
N 0 T E : Present Value Savings are Net of the Initial Transfer Amount of 145,300.00
Micro -Muni Debt Date: 02.10-1997 @ 13:50:15