This Resolution authorizes the issuance of not to exceed $6,000,000 Capital Improvement Refunding Special Revenue Bond, Series 2015A (the “Series 2015A Bond”). The proceeds of the Series 2015A Bond, together with other legally available funds of the City, will be issued for the purpose of: (a) refunding (i) $1,250,000 principal amount of Capital Improvement Special Revenue Bonds, Series 2007A (the “Series 2007A Bonds”) maturing on April 1, 2015, and (ii) $5,000,000 principal amount of Capital Improvement Special Revenue Bonds, Series 2010A (the “Series 2010A Bonds”) maturing on April 1, 2015 (collectively, the “Refunded Designated Maturities”) and (b) paying costs of issuance of the Series 2015A Bond. 

The City’s Medium Term Note Program was originally designed to take advantage of the interest rates for one to fifteen year maturities on the yield curve as part of the City's Covenant Debt portfolio. Upon maturity of certain designated maturities of the City's Capital Improvement Special Revenue Bonds, the City would issue new series of refunding bonds over successive periods ranging from one to fifteen years up until the last ten years of the overall thirty-year term of the Bonds, at which time the principal would begin to amortize.

The City, through its Financial Advisor, issued a Solicitation of Offers for Bank Term Loan and received five proposals. Wells Fargo Municipal Capital Strategies, LLC, a subsidiary of Wells Fargo Bank, National Association (“WFMCS”), submitted the proposal with the most favorable terms, including, based on all terms of the proposal, an indicative fixed interest rate of 1.90%. This indicative rate is based on interest rates at the time the proposal was submitted.  The rate is subject to change until the final fixed rate is locked pursuant to a rate lock agreement that will be executed prior to closing.  Due to the characteristics of the Series 2015A Bond, the anticipated market conditions, and the need for an expeditious sale to meet the timing for refunding of the Refunded Designated Maturities, it is being recommended that the method of sale be through a negotiated sale to WFMCS.

Along with the Resolution, the action will approve the form of and authorize the execution of a Direct Purchase Agreement with WFMCS and an interest rate lock agreement with Wells Fargo Bank, National Association, as well as authorize the Mayor to approve changes thereto and take other action necessary to complete the transaction.

The Finance Committee approved the issuance of the Series 2015A Bond at their meeting on March 13, 2015.