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<br />6.2A <br />Page 1 <br /> <br />REPORT <br /> <br />To the Honorable Mayor and City Council and <br />The Redevelopment Agency Board <br />From the Executive Director and the Ci Mana er <br /> <br />October 26, 2009 <br /> <br />SUBJECT <br />1997 Redevelopment Agency Bonds <br /> <br />RECOMMENDATION <br />By resolution, authorize the Redevelopment Agency Treasurer to pay-off all remaining <br />debt associated with the bonds that the Agency issued in 1997. <br /> <br />BACKGROUND <br />The Redevelopment Agency (RDA) issued $15,430,000 of bonds in 1997 to refund the <br />bonds it issued in 1991 to fund various projects. The 1997 refunding allowed the RDA <br />to realize savings by issuing bonds at a lower interest rate than it was paying on the <br />bonds issued in 1991. The final maturity on the 1997 bonds is July 15, 2011. <br /> <br />Staff has determined that the Agency will save approximately $28,000 in net interest <br />costs by paying off all ($2,860,000) of the outstanding principal on January 15, 2010. <br />This determination took into account not only the interest costs on the outstanding <br />bonds but also the interest that the RDA will forego by using cash to payoff all of the <br />outstanding principal early. After July 15, 2009 any bonds redeemed prior to the stated <br />maturity dates allow the RDA to do so without making any premium payments to the <br />bondholders. <br /> <br />Council Finance Committee Review <br />The Council Finance Committee reviewed this recommendation with the RDA Treasurer <br />at its October 19th meeting and concurs with this recommendation. <br /> <br />ALTERNATIVES <br />The RDA Board may elect not redeem the bonds early although doing so will expose <br />the RDA to an additional $28,000 in interest costs. <br /> <br />FISCAL IMPACT <br />Sufficient cash is available in the 1997 RDA Bonds debt service reserve fund and <br />working capital balance to provide for the redemption of all outstanding debt without <br />disrupting any of the RDA's planned services or programmatic objectiv s. <br /> <br /> <br />Briae~Or Peler Ingra . City Manager <br />Treasurer, Redevelopment Agency Executive Director, Redevelopment Agency Board <br /> <br /> <br />ATTACHMENTS <br />1. Resolution authorizing the redemption of the RDA Bonds issued in 1997. <br /> <br />RELATED DOCUMENTS IN CITY CLERK'S OFFICE <br />None <br />