AgdaPkt 2013-05-06 - Laserfiche WebLink

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6.2.C. - Page 3 does not close. Acceptance will be evidenced by the City Manger's signature on the bank's funding commitment letter. Final terms and conditions will be subject to approval by the City Council on May 20, 2013. FISCAL IMPACT The refunding has the potential to produce material NPV savings to the Capital Outlay Fund, which are presently expected to reduce debt service by approximately $300,000 annually through 2018. The Bank will incur loan funding costs when it is notified that the commitment letter has been accepted. If the transaction fails to close after the commitment letter is accepted by the City, the City will agree to reimburse the Bank for its legal fees (up to $7,500) and out of pocket expenses, and to pay a breakage fee. No breakage fee is due if the funding transaction is liquidated at no cost to the bank. Staff estimates that breakage fee could range from a high of approximately $20,000 to a low of approximately $5,000. The low end of this range is far more likely than the high end of the range. Because all of the documentation for the transaction has already been negotiated with the Bank, staff is not aware of a reason the City would back out of the transaction and incur breakage fees and related expenses. ALTERNATIVES If the Council does not authorize the City Manager to accept the Bank's proposal, staff will not undertake a private placement refunding with BBVA Compass Bank and will forego possible savings. Council could direct staff to refund these bonds via a public sale but it is unlikely that this approach will produce greater savings. ENVIRONMENTAL REVIEW This activity is not a project under CEQA as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or foreseeable physical change in the environment. ��---- BRIAN PONTY FINANCE DIRECTOR �" ROBERT B. BELL CITY MANAGER