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AI- 2939   12. B. 6.    
BOC Regular
Meeting Date: 08/01/2019  
Authorization to Issue Series 2019 GOLT Refunding Bonds
Submitted For: Kelli Scott
FROM: Kelli Scott, Administrator/Controller, Administration
Department: Administration  

Information
RESOLUTION:
Resolved, that the Calhoun County Board of Commissioners hereby adopts the attached Resolution Authorizing Issuance and Sale of Bonds to Refund the General Obligation Limited Tax Bonds previously issued in 2010 as presented, and authorizes the County Board Chair to sign the Resolution.
RECOMMENDATION:

County Administration recommends that the Board of Commissioners adopt the Resolution in the form attached hereto, approving the issuance of refunding bonds for the Capital Improvement Bonds issued in 2010; appointing Hilltop Securities as Underwriter; authorizing the County Administrator/Controller to sell the Bonds without further Board action; and other matters necessary to sell and deliver the Bonds.

BACKGROUND:
Calhoun County has previously issued General Obligation Limited Tax Bonds dated as June 18, 2010 for the purpose of financing costs to acquire and construct capital improvements to various County facilities. Such improvements included energy efficiency measures that continue to provide savings as guaranteed by Honeywell by contract.

The 2010 bonds qualified as "recovery zone economic development bonds" and the County had been receiving an interest subsidy from the U.S. Treasury.  Due to budgetary sequestration the U.S. Treasury no longer remits to the County the full subsidy credit, previously amounting to 45% of the interest payments.

The County's Bond Counsel and Financial Advisors have advised that current conditions in the bond market could permit the 2010 Bonds that are still outstanding to be refunded at a significant net present value savings by advance refunding them by tax-exempt bonds.

Upon approval of the attached Resolution, the County Administrator/Controller would proceed with the issuance of up to $5,000,000 of County Refunding Bonds if the refunding would result in net present value savings. The County pledge of full faith and credit will provide security for the Refunding Bonds.

ALTERNATIVES:
The Board of Commissioners could choose not to adopt the Resolution, which would require the County to continue to meet its obligations under the current debt service schedule for the 2010 bonds, and continue to pay net interest at a cost higher than current obligations.
SUMMARY:
It is recommended that the Board of Commissioners adopt the Resolution as presented. The approval of the Resolution will authorize the County Administrator/Controller to sell and deliver and receive payment for the proposed issue of bonds without the necessity of the County Board of Commissioners taking further action prior to sale and delivery of the Refunding Bonds. Approval by the Board of Commissioners will allow for interest payment savings on the outstanding 2010 Calhoun County General Obligation Limited Tax Bonds.

Fiscal Impact
BUDGETARY IMPACT:
Current estimates are 3.78% net present value savings, or approximately $159,000, over the remaining life of the outstanding 2010 bonds. This savings would lower cost to the County's General Fund and does not extend the life of the bonds or required debt service.
Attachments
2019 refundinding bond res
series 2019 refunding specs
Hilltop refunding letter
2010 refunding est savings

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