Finance has been working on refunding SID 1360 (Gabel Road). Part of the task was getting Gabel Road, Lynn Ave and Moore Lane rated by Standard & Poors. Unfortunately S&P rated the bonds as non-investment grade. The decision was based mainly on the number of undeveloped parcels in Miller Crossing and Gabel Road.

The bonds for SID 1360 were issued in 2003 with a net effective interest rate of 5.63%.  An analysis indicated a lower interest rate could be achieved by refinancing.  City Council passed a parameters resolution for 1360 on 07/25/11 which stated that savings on the reginancing should be at least $180,000.

There still are buyers interested in refinancing the project because of the lack of bonds available on the market.  Attached is a resolution that staff requests be added to the August 22nd agenda. The resolution adjusts the parameter of savings to $150,000 due to the non-investment grade rating. Staff is asking to add this item now because the interest rates for SIDs are very low and the underwriter wants to start marketing the bonds Wednesday August 24th to achieve the best possible interest rate.

Even at the new amount there are many property owners with significant savings.

A 3/4 vote of Council Members present is needed to add the item to the agenda; a simple majority is needed to approve the refunding.

The Council may:
-Approve the resolution, setting the refinancing in motion; or
-Not approve the resolution, leaving the current bonds in place.

The anticipated financial impact would be a decrease in savings from the refunding from $180,000 to $150,000.