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<br />Preview <br /> <br />Page 1 of2 <br /> <br /> <br />City of Sunny Isles Beach <br />18070 Collins Avenue <br />Sunny Isles Beach, Florida 33160 <br /> <br />(305) 947-0606 City Hall <br />(305) 949-3113 Fax <br /> <br />~El\'l 0 RA~IllJM <br /> <br />TO: <br /> <br />The Honorable Mayor and City Commission <br /> <br />FROM: <br /> <br />Minai Shah, Assistant City Manager-Finance <br /> <br />DATE: <br /> <br />November 9, 2011 <br /> <br />RE: <br /> <br />Issuance of a $10 million revenue bond to refund the outstanding 2001 A <br />Florida Municipal Loan Council Debt of approximately $7,700,000 and <br />obtain approximately $2,300,000 of new monies for capital projects, <br /> <br />RECOMMENDATION: <br /> <br />Staff is recommending the City Commission approve the ordinance and loan documents <br />with SunTrust Bank for the issuance of a $10 million revenue bond to be repaid over 15 <br />years with an interest rate of 2,38%. <br /> <br />REASONS: <br /> <br />The City has the option to refund the 200lA revenue bonds after ten years of issuance, <br />Since the current interest rate market is lower compared to ten years ago, staff took the <br />opportunity to determine if refinancing was a viable solution. The current 200 I A revenue <br />bonds have an interest rate between 4,75% and 5,25%, the effective rate of the <br />outstanding bonds is 4,99%. <br />The City obtained quotes from two banks, BB&T offered 2,93% and SunTrust offered <br />2,38%, Bank of America was not interested in issuing any tax-exempt bonds for this <br />calendar year. <br /> <br />Staff had elected to go with SunTrust with the 2,38% annual rate, This rate is locked and <br />approved for closing on or before November II, 2011. <br /> <br />Of the $10 million issuance, $7,740 million will be used to refund $7,575 million in <br />revenue bonds and the remaining balance is for other costs such as early redemption fee <br />($75,750), accrued interest ($77,250), and issuance costs ($12,000). The remaining <br />$2.260 million will be used for the development of City parks and the parking garage, <br /> <br />http://sibagenda, si bfl,net/agenda/Preview ,aspx?I temID=60 5 &MeetingID <br /> <br />The refunding of the $7.575 million in revenue bonds has an average annual savings of <br />$127,000 for a total savings of$I,908,130 over the life of the loan, However, since there <br />are one-time costs of $119,000 to refund the 200 I A revenue bonds, the net savings is <br /> <br />Agenda Item .?, 1\ <br />Date 11-,. .q - II <br />